Towards the end of the Internet of Money, in a chapter entitled ‘Elements of Trust: Unleashing Creativity’ Antonopoulos gives us a little insight into the nature of Bitcoin at the level of the source code, in layman’s terms!
The Illusion of Senders, Receivers and Accounts
When you search the source code of Bitcoin, you realise there are no such things as senders, receivers, or accounts, they simply do not exist.
There are inputs and outputs, but these don’t really correspond to senders and receivers - what we see when we look at Bitcoin’s source code is almost the ‘quantum or atomic nature of bitcoin’.
Copper has properties unique from Iron, but protons are part of both copper and iron, when combined in certain ways with other fundamental particles protons make up the pattern of either copper or iron, but protons are in themselves nothing like copper or iron.
Similarly, the ‘atomic’ elements of bitcoin are the components of transactions and the elements of the scripting language and these elements are looking for fundamental mathematical properties and cryptographic properties such as whether a hash is equal to another hash, or whether an elliptic curve signature matches another elliptic curve signature.
However these elements have nothing to do with the ‘senders’, ‘recipients’ and ‘accounts’ you may see on Bitcoin block explorers, such concepts are just constructions that give the illusion that Bitcoin is like a banking service.
The positive side of this is that it makes Bitcoin easier to understand for those new to it, but it may be a little misleading - for example you see a ‘wallet’, but your wallet doesn’t have coins, it has keys, and those keys can be copied, nothing like banking!
Ultimately, Bitcoin is a platform that guarantees certain trust functions.
Bitcoin: Providing the Building Blocks of Creativity
Bitcoin gives you a set of ingredients and a recipe (which can itself be tweaked) and if you understand how the ingredients work together and can follow the recipe, you can construct many unique and wonderful things such as crowdfunding projects, time locked contracts, and the Lightning network.
This is one of the massive advantages of Bitcoin - it is a flexible infrastructure that allows for payment systems and more to be built on it, not like the banking system which is much more inflexible.
Banking Privilege and Surveillance
In this section Antonopoulos goes full liberation idealist… worth quoting at length (abridged)
“We could face the fact that the reason more than 4 billion people are unbanked is because we require everyone to be identified on every side of every transaction, so that we can build a totalitarian surveillance system that the Stasi would be jealous of, to monitor every financial transaction from every corner of the planet. Because we have persuaded ourselves that our bourgeois sense of security will be protected, not by solving poverty, and not by reducing, perhaps, the bombing of other countries, but instead, by watching everyone all the time when they buy a burger—just in case.”
“They have built a system that can only do one thing: enslave us. That can only do one thing: impoverish us. That system removes freedom in the most efficient possible way to deliver profits. That system is broken, and it doesn’t scale. But if that is what you’re trying to do, it’s the most efficient you’ve ever seen.”
“By comparison, the crazy little mishmash system that we’ve built with bitcoin, that’s wrong and it’s slow and it can’t scale. It’s inefficient and it’s not as serious and sophisticated as the international banking system. But it delivers freedom and it allows us to unleash creativity.”
Bitcoin’s Atomic Structure - Final Thoughts…
Love this chapter, quite a deep philosophical dive into the inner workings of Bitcoin, to highlight that OK it is a bit slow, but it is also beautifully adaptable, and the point is to build things on top of it.
And also a pretty radical statement against the global banking system, say it like it is, I say!
In retrospect I think Bitcoin’s scaling problems are maybe greater than Antonopoulos thought: what with ordinals effectively making Lightening unworkable for a period….?
Even today, the way we tell the old-fashioned people that we are making money through mobile phones and computers, they don't even believe it. In this way we all know that everything has its problems and there are good things and bad things and the way we see it, we have benefited mostly from bitcoin till date. So this thing will be very good for us in time to come.
Change takes time I guess!
If you compare Bitcoin to VISA, yeah it's slow, but that is apples to oranges comparison. If you compare bitcoin to gold as a final settlement layer, then it is blazing fast.
Hmmm, very fair point,
BTW I'll drop that gold off I owe you next time I come to Finland, maybe a few years.
I would call that flexibilty "freedoom" 😉