Note: This article was first published in Hackernoon by myself. This is simply a copy of the article.
If you haven’t heard about Bitcoin by now, chances are you most likely live under a rock. From social media to the mainstream news, everyone these days is talking about Bitcoin. As someone who has been involved since 2014 and works in the industry, it definitely has been an exciting time. What once was a nerd’s utopia has now become a mainstream reality. However, with the recent influx of new users emerging into the space, I feel like many people don’t understand what Bitcoin actually is.
To fully understand what Bitcoin is and why it’s important, it’s important to talk about trust first. Chances are if you are reading this article, we have some sort of trust relationship established. You might follow me on Twitter, be an old friend, or just happened to stumble upon this article. Would you trust me with 10 dollars? I think most of you would. Now, would you trust me with 10 million dollars? I sincerely doubt it. Why should you ever have to trust me? Why should you have to trust a bank with your hard-earned money? Would you trust Equifax with your social security number? Why should you have to trust third parties in general?
Bitcoin is a completely trustless, decentralized system which allows anyone and everyone to transfer value on the internet, instantly. No middlemen, just pure value transfer from one individual to another. I don’t think many people realize how completely insane the concept of being able to transfer value over the internet in a decentralized manner is. Blockchain, the core technology powering Bitcoin, is designed in a way so that everyone using the network, miners and end users, are incentivized to behave in a productive way. Miners gain more out of behaving productively vs. maliciously to gain the block reward (12.5 BTC) and end users would have to pay crazy fees to spam the network, which would do little to no good for themselves. By building a system that incentivizes everyone to behave in a productive manner, a system is built where “trusted” middlemen can be completely eliminated and value can be exchanged peer-to-peer.
Now eliminating trusted middlemen today might sound crazy, but with modern day cryptography this can truly be achieved. Middlemen are an extreme liability. As a central point of failure, if the middlemen goes down, gets hacked, or decides to behave in a malicious manner, you as an end user are completely out of luck. In the past few years, think about how many data breaches have taken place. Whether you want to believe it or not, no matter how important you might be or think you are, your identity can easily be stolen. With the recent Equifax hack, chances are your social security number has been leaked. Equifax was supposed to be a “trusted” credit union, however they couldn’t even maintain their basic fiduciary duty of keeping your social security number secure. While this is a flaw of Equifax, this is really a flaw of the centralized system we know today. There is absolutely no need to store sensitive information on third parties. Bitcoin is about controlling YOUR data. If you hold the private keys to your Bitcoin wallet, you and only you control your wealth. No government or entity can take that away from you. This is the first time in modern human history financial sovereignty is achieved at the individual level.
Now that we talked about the flaws of centralization, let’s talk about the banking system we know today today. Currently, 40% of the entire world population is unbanked. Whether this is due to corrupt governments, lack of trustful banking institutions, or laws banning women or certain individuals from opening their own bank accounts, 40% of the entire world cannot control their wealth. I believe this is a fundamental human right. Why should a government prevent anyone from creating a bank account? Why should a government be allowed to arbitrarily print off money whenever they please?
Bitcoin allows anyone to open a wallet for free, no questions asked. The finite supply of Bitcoin cannot be modified, and makes it much easier to value than a traditional, fiat currency. In a world where people complain about the 10 minutes it takes their iPhone to turn on after it dies, it’s also insane to think we are still willing to wait up to 3 days for bank transfers to clear. Going into the year 2018, this is completely unacceptable. With Bitcoin, money can be sent to anyone across the world within minutes.
What’s important to take away from this is Bitcoin is not an investment, it’s a revolution. Blockchain, in my opinion, is the greatest invention of all time. It’s time to stop relying on third parties, and to take control of your own wealth. By being involved in the Bitcoin community you are helping the cause.