What is bitcoin & why should you care?

30 Jan 2018

Key features of Bitcoin-tech aka Blockchain

  • It’s a protocol that tells computers how to interact with each other
  • It implements a “trust-less” consensus reaching protocol for entering transactions between nodes into a publicly distributed ledger of transactions.
  • The ledger is available in real time to connected nodes
  • The ledger is unmodifiable
  • The ledger is complete

Why is bitcoin important?

  • It allows people to transfer value between each other without relying on a middleman. For example, some cultures don’t allow women to own their own bank accounts. Prohibited from owning the money they earn from their own labors, crypto can enable these women by giving them private, digital access to their earnings.
  • It eliminates the middlemen from the transfer of value from person to person. Middlemen typically charge fees in excess of what crypto can charge for the same transfer. Therefore, you can save money with crypto.
  • Middlemen keep private records and use obscure jargon to prevent people who utilize their financial services from questioning their financial product pricing. Crypto is transparent. Therefore, the pricing of services can be controlled by the people who use the product, not the people that offer the product. That’s fucking revolutionary.

Objections to crypto

  • Bitcoin doesn’t eliminate middlemen. It still requires miners. Reply forthcoming.
  • Because no one accepts it as payment, it is useless. However, some companies are setting up self-enclosed crypto economies in which people can trade tokens for products or vouchers.
  • Crypto requires computer power and energy consumption. So the people with the computer power and energy will dominate the crypto, just like the middlemen dominate the fiat currency banking industry. Reply forthcoming.
  • Because of its anonymous nature, crypto enables criminals. For example, crypto makes it easier for people that participate in child-trafficking to transfer value among themselves, and enter back into the ordinary economy with the crypto they earned from their hideous dealings. Reply needed.
  • Crypto is unregulated, so it has no rational guidance from policy makers. Reply forthcoming.

Outstanding questions

  • Why are gift cards reliable options for dark net vendors?
  • Should we call the blockchain a centralized-decentralized ledger of transactions, instead of a decentralized one?