No doubt everyone understands what Bitcoin is in its simple terms. However, for beginners, it is vital to read and understand an expert perspective on everything you need to know about Bitcoin.
In this article, blockchain experts ANDREAS M. ANTONOPOULOS provides more details on the topic. You will also understand the history, benefits, and other primary perspectives about this cryptocurrency. Keep reading.
What is bitcoin?
In providing more details on everything you need to know about bitcoin, it is vital to understand what this currency is.
The word Bitcoin was first published in a white paper by Satoshi Nakamoto in October 2008. In January 2009, people started participating in bitcoin mining with the launch of the live network.
Bitcoin was born with the first block known as the Genesis block. It contains a headline from a newspaper that read, “Chancellor of the Exchequer on the brink of second bailout for the banks.”
Some people believe that that message has meaning. Ideally, bitcoin serves two purposes. One purpose is to show proof of existence. The second depicts that bitcoin exist within the context of a peer-to-peer cash system which is not controlled by the state.
How bitcoin evolved
In understanding everything you need to know about bitcoin it is also vital to look at how this digital currency has evolved. At first, there was very low expectation. Even for Satoshi Nakamoto, this experiment did not seem likely to succeed to anyone.
Satoshi Nakamoto certainly believed in it but not strongly. Keep in mind that it was not the first digital cash system but the 20th. The most famous was the Liberty Dollar and gold. So, this comes on the heels of two decades of research into digital currencies using cryptographic primitives.
But Bitcoin was different in one fundamental way. In all the previous systems, there was a central server required to coordinate and prevent fraud. The big invention in Bitcoin is that it does not require the use of a server. Instead, it works collaboratively by the participation of thousands of computers.
Of course, there were few computers initially, and the security provided was not strong. At the same time, nobody saw Bitcoin as having value.
It took a full year and a half before the use of Bitcoin for the first commercial transaction. However, that transaction ascribe some value to Bitcoin.
So, Bitcoin evolved from something that had no value. A technology experiment into a massive, vibrant ecosystem of competing cryptocurrencies.
It now has a worldwide political and technological impact. Bitcoin has spawned an entire industry with thousands of start-ups. It is being actively discussed at Davos and the G20. It is indeed ironic how Bitcoin has developed over the years.
What success means in the crypto world
In the crypto world, bitcoin offers lots of freedom. To me this is what success means in the cryptos sphere. Just like other cryptocurrencies that provide a small area of freedom. A system that people who need it can use.
More people will invest in a digital currency created by Goldman Sachs than in Bitcoin. This is because people who have money want to preserve the status quo and not disrupt it.
Measuring how many people invested in one digital currency or some other does not define success. “To me, the measure of success in disruptive systems like bitcoin reflects in how much freedom they allow.”
Perspective on cryptocurrency
The perspectives to cryptocurrencies differ in different regions. In distressed economies like South America, Southeast Asia, and other places, cryptocurrencies aids the economy.
As an investor, you can choose to invest long term or short term. If you take a long-term perspective, then the volatility does not matter as much.
So if you invested two years ago and just held it in Bitcoin, you end up better off over a two or three-year period. One way to look at this is long-term stored value. This value helps to protect against currency devaluations for inflation, hyperinflation, or structure devaluation.
Other cryptos succeeding like Bitcoin
This depends on how you define success, says Andreas, “I think it depends on how you define success. It depends on which application you are looking at. I think we are going to see the emergence of several successful cryptocurrencies that will address different types of problems .
“It is difficult for another cryptocurrency to succeed in the narrow domain. This is something Bitcoin does very well. Bitcoin has a very high security, high-value transactions, a lot liquidity and a stable long-term value. I think that the early advantage of Bitcoin is very difficult to overcome.
Now, there will be currencies that differentiate. If they don’t differentiate enough, then they lose because Bitcoin is already there. Unless you have something radically better, it can not displace the early adopter from the existing system.
Bitcoin as a tool for solving societal problems
Yes, cryptocurrency does not solve societal problems. It does not also change the fact that there is wealth inequality and structural inequality throughout every society. What it does is reduce the power and number of intermediaries in the financial system.
One of the reasons why we have structural inequality is due to the behavior of financial intermediaries. These set of people benefit from cheap money and investments. Due to this, they are willing to take advantage of the system.
The use bitcoin is changing our world today. This article has provided a detailed guide on everything you need to know about bitcoin. To learn more about Bitcoin and how to become successful as a beginner, you can opt for The Crypto Factor.
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