The world is in financial disarray, currencies failing, economies in wild flights and jobs being lost.
But what if you could build an entirely new economy? One specifically designed for the digital realm. Well that is the design behind Bitcoin.
Bitcoin, for those of you who don't know, is a a digital online currency that was created in 2009 and was made by someone under the pseudonym Satoshi Nakamoto.
To clarify, there is:
"Bitcoin" (with a capital "B") is the protocol or the technology introduced by Satoshi Nakamoto
"bitcoin" or "bitcoins" - the digital cash
Like any economy you don't want too much too fast because then the value of your currency drops or , it's so slow that your economy grounds to a halt. It's designed to be a self stabilizing economy. Whether it actually is that way though, well that it a little bit more complicated.
You Are Your Own Bank
The world, for the first time in history, is switching to this new monetary system, a system where banks are no longer needed because payments can be made directly from one person to another.
More people are using bitcoin to transact. Image credit
Bitcoin is fundamentally different because with bitcoin you don't owe anyone anything and no one owes you anything. It is not a system based on that. It is a system based on ownership and no one can censor it, no one can seize it, no one can freeze it.
In November of 2008, just six weeks after the Lehman Brothers collapse, all over the world there were panicked debates on how to save the banks.
Then, on a little visited web forum for cryptographers, a document appears in which a completely new monetary system is proposed. The visionary author calls himself Satoshi Nakamoto.
These were the darkest days of the financial crisis. That to me suggests a very clever mind that saw the perfect opportunity to introduce a new radical technology and a new radical approach to money and finance at just the right moment when people would be very open to making this big shift that's required to adopt a new currency.
What's exciting for me is the evolution of a global economy. Right now we say we have a global economy, but I can't take a dollar from the US and give it to you in another country and have you know what to do with it. You would have to go and change it into your native currency.
When we eliminate that step and I can send you one form of payment and you can send me a product, in a matter of seconds, it starts to change things from a global perspective.
How Can Ones And Zeros Have Value?
How could this digital coin, invented by this Satoshi Nakamoto, become hundreds of times more valuable than the dollar? And why do enthusiasts want to switch to bitcoins?
I think a lot of people are underestimating the way in which bitcoin and the blockchain are going to change the power structures in society in general.
Central banks, through there control of the money supply, can make or break nations, bend leaders to their will and decide what industries thrive or die in our society. Their decisions are focused on profit and take little account of the far reaching effects those decisions have on people's lives and on the environment.
All transactions, whether corporate, governmental or personal, pass through the bank's skimming fingers as profit to those banks. They regulate themselves and are accountable to no one.
Bitcoin takes back this control of our money supply and puts it into the hands of the people, your hands. You can send money to anyone in the world instantaneously regardless of the amount and it costs pennies to send.
Governments cannot hyper-inflate it, decreasing its spending power, they can't tax it just because it changed hands and they can't censor it.
The funds you send go to the place you sent it without anyone skimming a percentage off the top and you don't need anyone's permission. You don't have to fill out paperwork, have an ID or stand in lines even. It's your money.
This Is Only The Beginning
Bitcoin is still in its early phase, much like the internet was when email first came out.
When the internet was invented, before search engines and browsers, people had a hard time understanding why anyone would want to send an email to someone or even own a computer. As software, apps and hardware were developed, more people began to see what could be done with a computer and started buying them. Then websites took off and changed the way we communicate and do business forever.
When the cell phone was first invented, no one understood why anyone would want a portable phone unless they were James Bond. "Why not use a pay phone?", they said. As mobile phones got smaller and apps were developed for them, more people could see how useful they were and now can't live without them.
Bitcoin does for money and finance, what the internet and the cell phone did for communications and business. Bitcoin is the first application and more are being developed every day at a faster pace.
Just like no one knew we would all be using cellphones and apps like Facebook and YouTube when the internet first appeared, we really have no idea of the new apps and technologies that will be invented using Bitcoin's technology and may one day become a part of our everyday lives.
It wasn't too long ago that using PayPal to make transactions online was controversial and people were worried about their money or privacy being compromised. Today, making financial transactions online is commonplace even though we enter all of our personal information into a computer whose files are stored in a central location, making them an easy target for hackers.
Now PayPal has grown into a mainstream money app used by a good segment of the population and by businesses around the world and Bitcoin is showing similar growth today as PayPal did then.
The apps that are being developed for transacting in bitcoin do not require you to divulge social security numbers, home addresses, names or phone numbers and are much more secure and hack proof.
We can only imagine what developers will invent in the future with this new, decentralized technology.
Money For Drug Dealers
What I'm most interested in is its decentralized nature and lack of a need for an authority to control it.
The Bitcoin network isn’t controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together.
That means that, in theory, one central authority can’t tinker with monetary policy and cause a meltdown – or simply decide to take people’s bitcoins away from them, as the Central European Bank decided to do in Cyprus in early 2013. And if some part of the network goes offline for some reason, the money keeps on flowing. credit
When one hears stories of bitcoin being used for the dark net or to buy drugs, I have to laugh. If you were a central bank in control of the worlds money supply and a competitor like Bitcoin started to gain traction as a viable currency that bypasses your authority, wouldn't you use your media influence to suggest they run stories that paint it in a bad light? Of course you would.
In fact, if bitcoin couldn't be used to purchase drugs then I would argue that it's not really money. Real money can purchase any commodity or product.
Conclusions
Some people think it's too late to get into Bitcoin, but that's like saying it's too late to get into the internet or too late to start using cell phones.
It's not too late to start using bitcoins at all. It's easier to use than money for a lot of transactions especially between countries and online.
Bitcoin as an investment is another matter all together. I'm not a financial adviser but it doesn't take a financial genius to realize that if more and more people begin using bitcoin to transact and the amount of bitcoins available to use in the world is finite. the price for a bitcoin will rise.
The same cannot be said for fiat currencies like the US dollar. The federal Reserve keeps creating more dollars at a rate that makes its purchasing powers diluted over time and you and I have no control of the process or where these funds are allocated. We only get inflation and the costs of bailing out the same banks through paying higher taxes and as a bonus, we get a debt that is impossible to repay.
Bitcoin, and cryptocurrencies like it, offer the general public an exit from supporting or relying on government-backed money.
At the beginning of 2016:
According to publicly available data, there are now over 10 million bitcoin wallets. Perhaps the most informative statistic of all is the transaction volume: the number of transactions has also grown impressively, from roughly 80,000 a day to more than 200,000 without showing any signs of slowing. credit
In December of 2016 there are just under 300,000 transaction per day and the number of new Bitcoin wallets are about 300,000 per month. That's a good steady growth in line with the rise in the price of bitcoin which is priced at $940 USD for one bitcoin. (27 Dec 2016)
If these numbers of bitcoin users and transactions continue to rise and as more countries continue to inflate their currencies, more people will need to find a way around this monetary madness and they now have an exit to pass through that works better than conventional money and is widely accepted all over the world.
Meanwhile, the supply of newly created bitcoins will, with a known measure of certainty, be halved every four years. More demand coupled with more scarcity creates higher prices. This means the chances are good that if you have a few bitcoins and hold on to them for ten, maybe five years, it could grow substantially into a good sized nest egg.
Of course, anything could happen in this world but the odds are pretty good for bitcoin and I, for one, am grabbing a few.
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Really great article and gives me some more info for a lot of my feelings as of late. Wow, it's been a real education in bitcoin and crypto since getting involved on Steemit less than two months ago. Really feels like Steemit is the gateway to getting more people on board with this financial revolution. Onward!
I've been learning a lot too.
I am very excited. Just made my first bitcoin purchase, a Trezor safe! Unbelievably easy and fast. The future is here! I want to accept bitcoins for CSA shares on our farm next growing season...
I've been thinking of getting a Trezor. It looks intuitive and simple to use and has good security measures.
Have you heard of FarmCoin? It's an alt coin for CSa's. People buy shares from the farm before the season begins so the farmer has money to buy seeds and materials. Then the customers spend the FarmCoins at the farm whn the crops are harvested and sold. It's pretty cool.
So cool! I haven't heard of that, but just another thing to check out. I should get to bed now though!
I opened a BTC wallet on coinbase and I know there are intermediary steps between that and Trezor, but I want to feel secure about owning my codes and having them locked up in my possession. Just signed up for a basic plan on genesis-mining as well, to see what happens there. Governments must be soiling themselves about now!
The adoption of this technology on a local scale is very exciting to me. Sure, sending payments around the world is cool, but even better, to me, is my neighbor using bitcoin or some other altcoin to buy vegetables and fruit from me or better yet, perennial plants to empower themselves even further. This is amazing.
Outstanding, well written, great introduction to the "unwashed masses." You've clearly shown the advantages and distinctives of bitcoin over $USD and other fiat currencies. Nice job! 😄😇😄
Thanks for reading the post and your kind words.
Bitcoin is pumping real hard atm.
It is doing very well indeed. It's exciting to follow it.
good job!
90 % male ! where are the females ??
They are here on Steemit.
clever answer :)
Thanks but I wasn't trying to be clever. They really are here.
I know this is true, noticing that was another thing.
and I think the reason is that Bitcoin is kind of all technical or investment some sort of thing. but Steemit is about having fun , blogging , talking about what you like and what you are good at, making friends etc..., maybe that is why women are more participating in this it.
That's right! 👍
its not so much bitcoin as the blockchain itself.Good post to publise it though!, thankyou
Agreed
Upvoted and shared on twitter. Following. Thanks for sharing. Stephen
Thanks
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