Magic Internet Money is now just “Money”.
Bitcoin is the largest peaceful protest in history. One small application for cryptography, and one giant revolution for the world.
The concept of digital currency is not new. It came in the late twenties when David Chaum introduced a digital currency, namely e-cash under the umbrella of his company DigiCash. Later on, his company declared bankruptcy. This is due to the reason that he used the concept of non-centralization instead of centralization.
After that, a lot of other tries for convincing the people for digital currency goes in vain. Since people do not require any centralized authority as they did not want to trust any third party.
To get knowledge about why Bitcoin matters for freedom, it is necessary to learn how Bitcoin works!
What is Bitcoin?
In 2008, Satoshi Nakamoto published a white paper — “Bitcoin: A Peer-to-Peer Electronic Cash System”. In this paper, Satoshi presented the idea of decentralized currency. As that was the start of Bitcoin and the idea purely lied on decentralization, so it had many features. i.e., no centralized authority, no single entity, involvement or dictation, across the border, secure and fast transactions, and these were secure with hashes and chain. In 2009, the first block was officially mined.
An understanding of the history of money leads to an understanding of bitcoin’s purpose.
If you don’t understand Bitcoin, you don’t understand money.
Properties of Bitcoin:
Bitcoin is the first decentralized application of blockchain. In a decentralized network, every node is connecting to another in such a way that there is no involvement of any other identity (3rd party). This means that this network is a peer to peer. Hence, one or any transaction goes to all peers in the network. Once the transaction occurs, it goes for verification (validation) and then records into the blockchain.
As the transaction takes place and after validation becomes the part of the network, it can never be changed. We have four options for any transaction, i.e., add, view, edit and delete. We have said that the Bitcoin is immutable, so for any transaction in the network we have two choices, either it can add or view. None of the participants or outside of the network can edit or delete the transaction.
This simply means that the value of each Bitcoin is equal to the other Bitcoin which exists in this world. Instead, in paper money, the value of each currency differs from other currencies. Nevertheless, this is not the case with Bitcoins. Mine Bitcoins have the same worth as yours.
In Bitcoin, permissionless means that any new participant can participate in the network without any pre-required permissions. If you want to become a part of the network, just download the software and congratulation you can now transact with anyone in the Bitcoin network.
Another prominent feature of Bitcoin is that it is divisible to 8 decimal places. The minimum amount that can transfer from one wallet to other is 0.00000001 (the 8th decimal place’s value is called satoshi). So, you can even buy a cup of coffee with it.
Bitcoin currency assures the limited supply. Total number of Bitcoins that will be mine till 2140 is 21 million. Every minor in the network continuously mining blocks and each miner on successfully winning the block is rewarding with 12.5 Bitcoins. However, since the halving in 2020, these rewards has become 6.25 coin per block. After 2140 when the generation of new Bitcoins will end, the minors will only get the processing fee for each successful transaction. Each miner takes 10 minutes on average for mining a block and generates a hash fulling the prerequisite conditions.
Bitcoins’ transactions are more secure, fast and easily transferable. Moreover, Bitcoin has no concern with the boundary limits (area or country), hence any transaction will send to another person, across the border in very few seconds. Everything you need for a transition is Bitcoin and another node in the same network with whom you want to transact.
Why Bitcoin Matters for Freedom?
Bitcoin is regularly increasing its impact on the world since it came into existence. We have many stories on how people increasing their wealth and getting more and more wealth from this digital currency. However, we have not heard from many about how Bitcoin can play a role in human right and human freedom.
Human Rights Foundation’s chief strategy officer Alex Gladstein talks about why Bitcoin is necessary for freedom. We people can send money to any other person across the border and around the globe without any involvement and dictation. Besides, it is also the first time on the whole history that a person can send money and have exceptionally censorship resistance.
Now, we have two choices: either we choose the centralized approach and compromise on censorship or go for the decentralized approach and show resistance on censorship. The second way leads us towards our essential right and freedom. By going for centralization, we might be used as a tool of control by the central authorities (might be the government). On the other hand, the decentralization approach puts more powers in the hands of the citizens.
There wasn’t any other way to place a global monitory transaction without third party participation — until Bitcoin has introduced. Moreover, the scarcity other than Bitcoin did not exist. We can say that Bitcoin is a revolutionary change to learn how humans can network.
The Bitcoin has achieved uniqueness by putting the ideas or decentralized and owner-less transactions. The transaction in this network can never be temper, delete, change or stop. You don’t know and even don’t want to know about other parties to whom you are transacting. And, within the same Bitcoin network, the power is distributed.
The role of miners is like executives — they work to add a block in the network after mining. These minors also decide whether the new block fulfil all requirements and can be install or not. In paper money, the scarcity compromised during the days when financial crises occur. The governments print more money than usual. However, Bitcoin’s first-ever block gives a clue about the total number of Bitcoins that will generate.
The decentralized cryptocurrencies, including Bitcoin, are more useful in such countries, where people don’t believe in governments or banking systems. The number of users (currently ~100M) in the Bitcoin network is increasing drastically — it is 1% population of the whole world. However, more than 4 billion people live under centralized authorities. So, Bitcoin is an excellent opportunity for those people who grabs it and make an impact.
We people need to differentiate between the public (i.e., Bitcoin and Ethereum, etc.) and private blockchains. A private blockchain is mostly closed, censored, permissioned and centralized. Open or public blockchains provide users with more privacy, freedom of speech and secure money usage.
The Bitcoin currency is now more than a decade old. But, it is still in its initial stages. If we take the example of mobile technology, during the early days, mobiles were so expensive and had limited functionalities. Now, the mobiles are affordable and provide you with maximum functions. Bitcoin is following the same pattern and will be more user friendly and widespread adoption.
Bitcoin grows one day at a time.
One transaction sent at a time.
One satoshi earned at a time.
One wallet created at a time.
One node synced at a time.
One block mined at a time.
One hodler born at a time.
The Bitcoin network designed in such a way that it provides the best security. Nevertheless, this security gain by compromising efficiency and scalability. We can grow up the network speed by making the transactions off-chain and spreading it to the network (on-chain). It costs less and provides more speed. So, with the usage of Lightning, millions of transactions can record in seconds. If the previously mentioned system fails — no worries, it will be used as a blueprint to help in the scalability of decentralized technology. Nevertheless, the future of freedom depends upon the decentralization of the applications.
“Thinking you’re too late to buy bitcoin is the same as thinking you’re too late to use the internet.”
Netflix didn’t kill blockbuster.
Ridiculous late fees did.
Uber didn’t kill the taxi business.
Limited access and fare control did.
Amazon didn’t kill other retailers.
Poor customer service did.
Bitcoin didn’t kill banking.
Inflation and fractional reserves did.