In the cryptosphere there are persistent rumors that even the Queen of England wanted to join the topic of cryptocurrency. Obviously, it didn’t work out very …
If you look at this joke a little better, then one of the most important factors by which we can spend the money in our wallet is really whose face is depicted on them. Or a flag. We are sure that the 1 dollar note with George Washington depicted on it has a certain value and, therefore, we can use it as a currency. If you now offer me to buy a pretzel for one dollar from me, and I agree that this is a reasonable exchange compared to what else I could get for the portrait of Mr. Washington, then we can assume that the transaction was a success.
Soon, Bitcoin will change all that. And today’s article is about that.
The memory of my first acquaintance with the world of cryptocurrencies is still very fresh in my memory. I spent countless hours, clicking the mouse, scrolling through the pages and reading the information, and at the same time I never knew what to believe. Absorbing huge doses of caffeine, I fidgeted in my chair, worrying about how to invest my money, and if I would ever see them again. But as I learned more, the number of questions in my head only increased.
In 1668, Thomas Hobbes wrote in Leviathan that knowledge is power. Knowledge is really a powerful weapon that can cope with curiosity, skepticism and fear. The key to understanding everything in the world – whether it be natural disasters, historical events, or impressive price fluctuations of the new currency – is to learn to understand what is behind the picture that we see in the news.
That is why I want to tell you about the seven key features and characteristics of Bitcoin and other cryptocurrencies. This is a brief introduction for beginners, after which cryptocurrencies will no longer seem so mysterious to you.
1. Decentralization
This is the first and, without a doubt, the most common concept that you will have to face constantly in the cryptosphere. The phrase “We are working on a decentralized [any well-known product can be entered here]” is a new way to become famous. This is the slogan of most blockchain companies, after which they begin to explain why the decision to make their product decentralized is the most ingenious idea since the time when sliced bread appeared on store shelves.
“Decentralized” is just a beautiful term, meaning “without intermediaries.”
If we meet in the park, and I give you a dollar, and you give me an apple, then we can say that we made a deal, one on one. Another unusual word is peer-to-peer. You and I did not need a bank to ensure a secure transaction, because we were both in the park. That’s what decentralized means, and Bitcoin is just a tool to transfer money.
The same idea can be applied to almost everything. Decentralized way to find housing? This is AirBnB without company participation. Decentralized search for fellow travelers? This is Uber without an app. And so on. The question that remains for us to answer is: when will this be relevant?
2. Transparency
One of the most popular arguments against Bitcoin, which is often heard from representatives of old financial institutions and important figures in the traditional financial sphere, is that people will abuse them in order to launder money, buy drugs and finance wars. But wait, what did the criminals use until 2008, when Bitcoin did not exist yet? Oh yeah, the very money that we now use.
Crime is a property of society, not currency. Criminals will choose any economic tools that are most appropriate for them. If one of the suitable tools disappears, they will not cease to be criminals. Anyway, Bitcoin is a great opportunity to prevent the use of money for such purposes, since this cryptocurrency is in fact transparent.
The history of all transactions is stored in the blockchain, which is public, accessible to everyone on the network and easy to understand. Thus, even we will be able to see the entire history of the balance of any account where the money from this account was sent and where it came from. Of course, the addresses are encrypted, but special security agents — something like the Bitcoin police — have ways to access this data in case of suspicious transactions. The same applies to traditional power structures.
On the other hand, I know some people who do not show much interest in a transparent financial system: those who are at the helm of the traditional financial system. I wonder why.
3. Security
Consider how often you spend money, and do not immediately receive a check. At least in Germany it is common practice. In the bar. In the restaurant. In the dry cleaning. Is it not suspicious? There is no confirmation of payment. Perhaps that is why credit card fraud is a “business” whose turnover amounts to 200 billion dollars a year.
Along with the public transaction history embedded in the Bitcoin system and other cryptocurrencies, which makes it easier to track your money, how this transaction history is formed is also much safer than trusting a stranger with your money or credit card information.
You could do without it…
All transactions in the Bitcoin network are added to the blocks that are interconnected in a chain. Hence the name blockchain or chain of blocks. Each block contains a link to the previous block with a unique mathematical identification feature, which is calculated using a complex algorithm. Thanks to this, it is simply impossible to hide your transactions or spend more money than you have.
Therefore, Bitcoin will not only help us to have a much better idea of where our money goes, but also make the use of our tools safer. And it is beautiful.
To be continued…
Source: chby.io
