Here’s What You Need to Know About Bitcoin and Blockchain
It may be Radical, Confusing and Strange but Ignore at your Own Peril.
With the sea of information out there, it’s easy to get overwhelmed and miss all the important problem solving attributes that Bitcoin has to offer…
Cryptocurrencies are evolving at such a high velocity that it can be difficult to understand what’s going on.Ferris Bueller once said, 'if you don't stop and look around every once a while, you could miss it.'Click To Tweet
This was exactly how I missed Bitcoin’s surge to stardom. Being so engrossed in my own life and business, I completely disregarded Bitcoin as a passing fad, ponzi scheme or something hackers wanted for ransomware.
After digging much deeper, I found out that there is more to Bitcoin’s technology than just a get rich quick promise. Most who bought BTC in December never really cared about the tech, they were only interested in the quick profits and only jumped onto the bandwagon because of the overhype.
Visionaries like Peter Thiel predicts that Bitcoin could be the next gold. and even Tim Draper who refuted when being asked, “Are you going to sell your Bitcoin for fiat?” with”Why should I sell the future for the past?”
You probably know that Bitcoin use and interest is on the rise. But do you know how big it really is?
In 2017, the cryptocurrency market cap nearly reached $600,000,000,000 dollars worldwide. With Bitcoin accounting for nearly 40% dominance.
And that market cap peaked to more than $800,000,000,000 in January, shortly before the worldwide market correction.
To give you some perspective on how much money that is, at $800 billion the cryptocurrency market cap is even bigger than countries like Brazil, Spain, Singapore and Russia.
At the moment, all the money in the world is at around $83.6 Trillion, that would put cryptocurrencies at just 0.6% of that ridiculous amount.
For it to become just 1% of all the world’s currency would price 1 BTC at hundreds of thousands of dollars if not a million. And that number will only continue to rise due to the limited supply of bitcoins at ~21 million fixed in the code.
So even at a $350 billion market cap, cryptos are matching some of the world’s largest economies.
With a trend this big, you can expect some very disruptive effects. And one of the most significant areas that we’ve already begun to see is the financial sector and governing bodies.
Sheen Shah, a Morgan Stanley Strategist is saying that Bitcoin is behaving a lot like how Nasdaq was 20 years ago during the dot-com bubble except that this is unfolding 15 times faster.
And if we stay on the current trajectory, statistical experts like Tom Lee are predicting that Bitcoin will touch $91,000 by March 2020. In an extreme bullish case, John McAfee made a bet that he would eat his dick if Bitcoin doesn’t reach $1,000,000 by the end of 2020.
According to Tim Draper, who made his Billion dollar fortune predicting and investing in future trends;'I think Bitcoin is the Future Currency. I don't know why anyone would want to go back to fiat when crypto is distributed, secure and global, while fiat is subject to the whims of political forces.'Click To Tweet
This isn’t just game-changing, this is world-changing and will bring about disruption to every facet of our current economic framework. However, these changes are a double-edged sword.
If you’re not prepared, you will miss out on what could be the biggest wealth transfer in history.
This presents an opportunity for you to be ahead of the game at so many levels while others are still ignorant and still figuring out what all the fuss is about.
The solution Bitcoin is offering the world is Decentralization. Giving back power to the people without needing to trust any third party.
Related: Bitcoin Vs. Blockchain
If you’ve never understood what is wrong with centralization, just observe how increasingly reliant we are on central platforms, institutions and authorities, and how much of our trust had been abused over the past decade.
Why is there a need to revolutionize the way we store money or rely on third parties and concentrate all our funds, data and information all in one grand central place?
Well, for the most part it turns it into one big shiny honeypot which then becomes an irresistible target for anyone who has the skills to concentrate all their time and effort into breaking in.
At the moment, most of our lives depend on running systems and networks that keeps big lumps of information in one single place, and that makes it vulnerable to hacks.With centralized systems, there are only two types that exist in this world, those that have been hacked and the ones that will be hacked. Click To Tweet
In 2016, hackers stole the personal information of 57 million users on Uber and they hid that fact from the public by paying the hackers $100,000 and deleting their tracks.
If you aren’t worried about that, the Equifax Data Breach might be more concerning as vital information and social security numbers of 143 million customers were compromised.
Not to mention the massive breach that Yahoo disclosed involved more than 1 billion accounts.
In fact, banks too are susceptible to attack like Italy’s major bank UniCredit which had been targeted and over 400,000 accounts were stolen.
This is not only unacceptable by today’s technological standards, it is downright dangerous and has led to millions of people potentially vulnerable to identity theft and fraud.
Centralized crypto exchanges too are not an exception. With the case of the infamous Mt. Gox hack which saw a loss of almost $500 million dollars worth of Bitcoins lost. These are custodial services which store your cryptocurrencies for you.
The Truth Machine describes how companies like Uber, Facebook and Airbnb have become examples of entrenched monopoly of power. Companies like these are being entrusted to store records of everything we do on the internet but are constantly being abused and hacked.
And quite frankly, people are getting fed-up with the way these systems are failing all the time.
Bitcoin and Blockchain could potentially solve this trillion dollar dilemma once and for all. It is also asking all the important questions about what money should be and how data can be distributed, secure and global.
Believing in crypto means you’re putting your trust in math and computer science.
So what is really behind Bitcoin’s technology?
Bitcoin is a unified protocol for transmitting value.
Imagine a trustless decentralized network that allows anyone anywhere around the world to transmit value (money) and transmit that in a matter of seconds anywhere in the world transparently, safely and almost instantaneously.
Unlike the transfer of gold or even cash, bitcoin can transfer value almost instantly. And they can do so at a fraction of what is possible today with banking.
On the Bitcoin network, it is viable to send Bitcoins anywhere from a few dollars to billions of dollars worth securely. The receiver will get it in about 10 minutes. Now compare that to a traditional wire transfer which takes a few business days to complete. The cost to wire money can vary anywhere from $35 to $70.
In case you are unaware, there is also an upper limit on how much money you can transfer through a bank without first raising the alarm and a few red flags.
International wires also eat up 1%-15% of the total amount of money sent. (As ridiculous as it sounds, I recently sent $80 from Singapore to the US and it cost me $50 just to send that amount)
As far as sending gold, it takes 3-14 days domestically and is very expensive. So, being able to quickly send monetary value anywhere in the world is a very valuable utility that Bitcoin possess. And so far no other cryptocurrency has proven themselves to be as safe, reliable and secure as Bitcoin is at a scale this big.
Intermediaries like banks, governing dept., platforms will be made redundant when this technology evolves and becomes easier and easier to use for the average Joe. When the roads are paved and the electricity is running, it will be far too late for you to capitalize.
Bitcoin is giving power back to the people. The power of self-reliance and trust in our own terms.
So why Bitcoin and not just the Blockchain?
The blockchain is just a public digital ledger with no one to verify the authenticity of its transactions without the monetary incentive and value that Bitcoin is.
The engineering aspect of the technology only works as intended by Nakamoto only when merged with economics, game theory and the basic principle of supply and demand.
A blockchain is not a central server located in one location, but a ledger that continuously updates all around the world, miners who verify the authenticity of the transactions will then be rewarded with Bitcoins for their work.
In other words, the financial reward of the Bitcoin network maintains the integrity of the entire system to good effect. It disallows spam transactions and fraudulent Bitcoins to surface within the network.
And you can now see why big banks and economists alike are so critically outspoken about Bitcoin and other cryptocurrencies.
“The internet was created to move information, that information needed to be stored somewhere, so everyone on earth has a zillion databases. Essentially, you can think of them like houses. It’s hard to break into a house, but not impossible, and cybersecurity is just a lot of really fancy ways to protect that house.”
Blockchain technology breaks the database into a million tiny pieces, which are then spread across thousands of computers. “Instead of breaking into a house, you now have to break into an entire town.” ~ Jamie Smith, CEO of the Blockchain Business Council and head of communications for BitFury, a leading blockchain technology company.
Satoshi Nakamoto wanted to create what was the first independent banking system that central banks or governments couldn’t lay their finger on.
Compare this to a company like Mastercard being able to stop the financial transactions of Wikileaks in Operation Payback or banks freezing customer accounts. A Bitcoin transaction cannot be stopped once it has been made and spent.
Bitcoin would be free from any one centralize control and governments.
They couldn’t shut it down even if they wanted to. Nakamoto isn’t just brilliant in this sense, he is equally wise to step away and disappear.
There’s a reason why he stepped back.
Having such a control over the global Bitcoin ecosystem would ultimately put it at risk. Its ultimately like a single red button that you can push.
Somebody could put a gun to his head and force him to do as he’s being told. That cannot happen now simply because the parties involved are distributed globally.
Imagine Bill Gates stepping away after launching Windows 95 or even Steve Jobs after the release of the iPhone. Without centers of resistance, Bitcoin would just be a very expensive database.
Also Bitcoin could become so much bigger than any one person or leader. A leader can only bring it so far…
Nakamoto envisioned that the networks would continue to grow based on general consensus among the developers, exchanges and miners.
This is the very first of its kind, decentralized peer-to-peer electronic cash system that doesn’t rely on the whims and fancies of a few powerful people.
No central bank can devalue the supply of Bitcoins to justify whatever benevolent intention they may have.
Or, rather, that is just one of the many powerful reasons why Bitcoin is far superior compared to any one paper currency. When too much money is printed, the value goes down.
Its simple and basic economics of supply and demand.
We’re in fact staring into the future of finance.
When you look deep within the code of Bitcoin there is this few lines that sets Bitcoin apart. This is the one piece of code that ensures that there will not be more than 21,000,000 coins minted.
In the case of bitcoin, decentralization is a wonderful and fascinating element of surprise. One thing is for sure, this radical idea has finally coincided with the technology and engineering needed to make it all happen.
This is the most exciting invention to ever happen since the internet. Despite all the mainstream attention it is getting now, it is still in its infancy, and therefore the price swings are extremely volatile.
Don’t ever let anyone convince you otherwise.
But the opportunity is here for you and me.
When the roads are paved, and electricity is running, and your Uber driver is expecting Bitcoins as payment, it’ll be too late then.
But more importantly, its invention has sparked a new wave of decentralization, autonomization, transparency, privacy, security, and sovereignty; that demands a completely new way of looking at, thinking about, and doing things.