INTRODUCTION TO CRYPTOCURRENCIES AND BITCOIN RELATIVE TO THE WORLD ECONOMICS – THE UNTOLD STORY (Part 1)

This article is a work of fiction. Names, characters, places, and incidents are either the product of the author’s imagination or are used fictitiously. Any resemblance to actual events or persons, living or dead, is entirely coincidental.

So, new to the crypto land? Or been here a while and still you don’t understand certain things, the only thing that brought you here was the opportunity to be rich, I mean 1 Bitcoin is currently worth over 10,000 USD, 1 Ethereum is worth almost 500 USD, but you have probably been filled with FUDs(Fear Uncertainty and Doubt) or been caught by FOMO(Fear of Missing Out), so you are thinking of coming in, making a huge profit and running away... classic! Sounds smart, but hold up! Before you take any rash decision forget everything you have heard, everything you have read and follow me through this fictitious story of the unimaginable were I attempt to dissect and illustrate certain things to you. Yeah, the story is long, very long! Get your 3D glasses and tighten your seat belts.

IN THE BEGINNING THERE WAS DIGITAL CASH BUT…

Yes, in the beginning there were other caricatures of the modern day cryptocurrencies, but they had an issue called double spending, what do I mean? Let me explain it in a way you will understand, It’s like the piece of technology we enjoy today, when you send someone an email, or message it goes to the person’s phone and also stays in your phone unless you deleted it, very cool right? Not so cool for cryptocurrencies, imagine you had 2 bitcoins and sent 1 bitcoin to someone else, yes the person has a bitcoin now, but you still had 2 bitcoins instead of 1, yikes! that means you could keep sending to other people, buy a lot of things and still have your 2 bitcoins – I know that really sounds wonderful, but we all know it’s a problem.

Enter Satoshi Nakamoto with Bitcoin, a peer to peer completely decentralised system. P2P, what does this remind you of? Torrents right? I am sure you are seeing how technology evolves, the way torrents worked was simple, someone uploads a file and starts seeding, other people download such file and start seeding it too, even if the first person deletes his file or something happens to him others would keep carrying his torch, on and on, all over the world like a continuous cycle.

That’s why it’s always hard sometimes to download a torrent file that is more than 10 years old, maybe everyone stopped seeding? Who knows? So how does it work? Someone does a transaction (sending Bitcoin) – this information is then passed along to a P2P network of computers that are also called nodes, then controllers of this nodes/computers verify this transaction and the status of the person who initiated the transaction by solving mathematical problems using known algorithms, once this transaction has been verified, a block is created and added to the blockchain which forms a ledger, visible for all to see.

It should be noted that people who control these nodes and verify transactions are called miners, hence that is why when you see your bitcoin transactions on the blockchain, you see all those 1 confirmations, 2 confirmations, 3 confirmations etc. So, now that you have an idea of what bitcoin and cryptocurrency in general entails, I know what you are thinking, you have still not seen the usefulness of having something like Bitcoin right? So let’s talk about that, but first…

BITCOIN HAS NO VALUE! IT’S A PONZI SCHEME…

Yes! The theory of the greater fool! You expect someone else to buy something of sentimental value at a higher price from you. Sounds good on the surface, but here is the problem, in this world, the only things that actually do have value are food, water, shelter and clothing (subjective). Think about it, why do the value of this things keep climbing up relative to our monies? It’s called inflation baby! And it’s here to stay!

My fellow Nigerians can bear me witness on this, there was a time we used 1 kobo (0.01 naira) to buy a lot of sweets, fast forward till today, even 500 kobo (5 naira) can’t buy anything again, infact it is so bad that kobos are extinct and people can’t even use them as a form of payment, reminds me of something… MMM? TBC? I mean the mavros can’t be used to buy anything, same as the TBC, I mean, will you even accept such things as payment? I know you will say common! How can you compare kobo a subset of the all-powerful Nigerian Naira backed by the Nigerian Government to Ponzi schemes? Oh! what a patriotic citizen you are! Okay then, why don’t you start accepting your salaries, and any form of money you receive in kobo, I mean kobo coins, don’t worry I will personally hire someone or a lot of people to carry the kobo up and down for you.

To Be Continued!

Enjoyed this article? Watch out for the second part.

Author : @prince-octavian

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