Tuesday, March 6, 2018

The technical side "What is bitcoin?"

In my last article i showed you a video where the bitcoin was describe as a digital currency. The character of bitcoin would always be stated to emphatically remind us that this should describe what a "bitcoin" is,  Its DE-CENTRALIZED,  DIGITAL CURRENCY,   USUALLY SEND THRU INTERNET,   COINS OR MONEY CAN BE TRANSFERRED PERSON TO PERSON,  NO CLEARING HOUSE NEEDED OR A BANK,  FEES ARE LOWER,  BORDERLESS -CAN BE USED IN ANY COUNTRY,  ACCOUNT CANNOT BE FROSEN, ACCOUNT NEEDS NO ARBITRATRY REQUIREMENTS,  BITCOINS ARE KEPT ON DIGITAL WALLET ( computer, mobile device), BITCOIN ARE SECURED THRU THE BLOCKCHAIN ( PUBLIC LEDGER) WITH THE MINERS,  SOFTWARE IS OPEN SOURCE- ANYONE CAN REVIEW THE TRANSACTIONS.

The first video  was more of a simplified form for us to understand what a bitcoin is . But let's watch from a more technical side of bitcoin.  The man on the video is Andreas Antonopolous who is a professional techman where he practised being a security expert on computers . From the time he was involved with bitcoin , he never stopped to understand more about this new technology until this time for about 7 years he had been a lecturer for the bitcoin technology, had written some books "Bitcoin as Internet of Money" and had travelled around the world to promote bitcoin.




Important Points in the lectures of Andreas Antonopolus regarding bitcoin technology ;

1. Bitcoin isn't money. The blockchain isn't a system of currency. It is a platform of trust. 
It's not a company, it's not a product, it's not a service you sign up for. it's not a currency.
 Currency is just the first application. 

2.It is the concept of decentralization applied to the human communication of value.    Money is one of the oldest technologies humanity has.  It precedes writing.The very first samples of writing we have are spreadsheets.  They are tallies and ledgers of debts owed and money pre-existed that writing. You might even speculate that money had an oral tradition  Until it needed to invent a written tradition so writing was created for it. 

3. In the history of money that now spans tens of thousands of years,  there have been maybe five major changes.  From pure barter exchange to the introduction of the first abstraction of value, shells, feathers, beads, nuts, stones, and then precious metals. And then paper money, and then plastic money, and now, network money.  

4. Bitcoin introduces a platform on which you can run currency as an application . A system completely decentralized like the Internet itself.  It is not money for the Internet but The Internet of Money. 

5. And what is money? Money is a language.  Money is a linguistic abstraction. Money is a language that we use to communicate value to each other , Money simply allows us to express value  and that value may have economic consequences but it also has other consequences. We use money to express and create social bonds,  and relationships, and associations, and to create organization. Money is a linguistic abstraction. Money is a language that we use to communicate value to each other.  that is completely decentralized.  And what that does is it introduces the very same things that the Internet brought to communication.  If money  is speech, if money is a language and you disconnected from all other media, and you make it pure speech, pure content,  an Internet content type, a protocol designation money over IP, it completely separates it from all of these previous notions of nations, sovereign issuers, institutions that control.

6. And so we go from institution-based money to network-based money , And of course, everyone will welcome this with open arms. Not a chance.  What do you think they said the first time someone was presented , with a gold depository certificate instead of a gold coin?  They said: "Hah, that's not money!  Go away!" What do you think happened in 1950 the first time someone showed up , at a motel and presented their diners club membership card and said: "I'll pay with this piece of paper!"  "That's not money. Go away!" And now we're on the verge of a new transformation of money. We're on the verge of creating the first completely global,  completely borderless, completely decentralized, and completely open form of money, one where you can build applications because this money is programmable , and you don't need to ask anyone's permission to launch an application any more than you need to ask permission to launch an application on the Internet. is two interested participants. That is your market segment and you have an application.  And a million applications will flourish

7. When you push innovation to the edges of the network,  when you remove the requirement for permission, what happens? Exponential explosion in innovation. The applications that could not be built on the old systems of money because they required permission because they required a significantly large market segment,  because they required adoption by many, in order to be available at all.  Now, none of those requirements exist.  Anyone in the world can download an application or use even a feature phone with text messaging  and immediately acquire the same powers that institutions of banking have today. And when I say anyone, that's only scratching the surface.  Because ironically enough, not only does Bitcoin and blockchain currency not recognize borders, it also does not recognize people. It doesn't matter if you're a person or a refrigerator, or a self-driving car.

8. Thought-out the history of money ownership of currency required personhood either as an individual or as an association of individuals in a corporation. Bitcoin can be owned by machines,  Bitcoin can be owned by software agents, machines can pay each other  and that is not just about economic activity. It's the basis for market-based security systems. It's the basis for creating bonds of authentication between devices. It's the basis of new applications that have never been done before Bitcoin and blockchain technology unifies the systems of money. Today we have systems of money for small payments, systems of money for large payments. We have systems of money for payments between individuals, we have systems of money for payments between companies, we have systems of money for payments between governments. 

9. That's how communication used to be before the Internet.  We had systems of communication for pictures, systems of communication for letters systems of communication for short distance and long distance and the Internet came and unified all of those.  What The Internet of Money does is, it creates a single network which can do , a micro transaction to a giga transaction , in seconds, anywhere in the world for any participant without permission.  

10. But if you just look at the application of money, you're missing the point, because you can take the language, the building blocks of this platform, and use them to construct other languages that communicate value. Tokens, reward points, brand loyalty coins. Today there are over a thousand digital currencies using the design pattern, the recipe of Bitcoin. Most of them are junk. some are not And over the next decade, we are going to see tens of thousands and then hundreds of thousands of coin,  Some will have economic use, some will simply be expressions of loyalty, affiliation.  They will represent items in the physical world.  The title for a house,  the controlling key for a car , that can be transferred from one owner to another and five seconds  , that owner can step into the car and drive away because the car can validate , the new standard of ownership. We cannot yet imagine what applications we're going to build around this. But one of the interesting things we're beginning to observe , is that money arises out of the social construct of Homo sapiens spontaneously. 


11. Toddlers invent money in kindergarten, blocks and rubber bands and Pokemon cards and other little tokens, abstractions of value that they exchanged strengthen social bonds, to express loyalty and friendship, to learn about sharing. Children will be building currencies. Only this time these currencies will be global, unforgeable, and scalable on day one. Few years from now, Maria will be launching Maria coin in her kindergarten to compete against Joey  and It won't really matter to anyone. Until of course, Justin Bieber launches Justin Bieber coin and it happens to surpass the market capitalization , of 30 nations on this planet, and we are all writing horrified opinion editorials ,about how the world is going to hell.

12.  Banking has never been the most innovative sector in the world, because there is a very careful balance between innovation and the conservative fiduciary duty, that exists in banking, that must exist when you control other people's money.  And yet with Bitcoin, you don't control other people's money.n Bitcoin, I control my money. I have complete and total authority over my Bitcoin. It cannot be seized, it cannot be frozen,  it cannot be censored, my transactions cannot be intercepted, and they cannot be stopped. And I can do so with almost complete anonymity and so can anyone , 5 minutes after they download an application , and money has changed forever and banking has changed forever.y the idea that you can proceed in the industry of money, in the industries of commerce, and maintain the same conservative attitude,  that has existed now for centuries , ever since merchants in Venice and Amsterdam ,  started issuing depository certificates and providing banking services , That is gone.

14. You cannot operate closed systems that have borders,  and require permission to join at a rate of innovation that is controlled by the most conservative tendencies within, your organization because now you are competing with a technology that enables exponential growth, 
 
 15. and an astonishing two and a half billion people are completely unbanked.
 They will leapfrog. Every single child born today . will never have a bank account.  They will have a bank app. A bank app that doesn't give them an account. A bank app that makes them a banker, an international banker in an app.  But they will also never use paper money. Because by the time they get to an age where they really start using money, there is no paper money. And so the rate of exponential growth has already started. 

16. Remember that they said the exact same thing about the Internet. And when you give it to two or three billion people, they're not interested in those things. When you take digital currency mainstream and give it to the four billion people who have been isolated from international finance and commerce, and you give them the opportunity to control their money , against the spotted governments and corrupt banks that are stealing from them, you give them the opportunity