The 5 big Bitcoin stories
Satoshi Nakamoto’s Bitcoin Whitepaper lays the foundation on nine pages for a digital asset that has already created a multi-billion dollar ecosystem after ten years. Where Bitcoin derives its value from is a question to which there are many answers.
This week we look at five innovations that Satoshi has made possible and why you should invest in BTC, read also https://london.storeboard.com/blogs/investing/how-to-wisely-invest-in-blockchain-based-cryptocurrencies/966288.
Be your own bank
The crypto-motto is more than a platitude. According to World Bank data, around 1.7 billion people worldwide do not have rudimentary access to the financial sector. In other words, almost a quarter of all people do not have a bank account and are therefore excluded from global trade and economic exit.
Especially in sub-Saharan Africa, the lack of financial infrastructure poses massive problems for the poorest sections of the population. Even those who have the privilege of having relatives abroad who generate income are dependent on monopolistic corporations such as Western Union. Because where there is no account, there is no bank transfer. Money can therefore only be sent in cash – and that is expensive.
If, on the other hand, you want to send Bitcoin, all you need is a digital device such as a laptop or smartphone and Internet access. The potential of this use case is enormous given the sheer number of people without a bank account.
Scarcity in the digital space is something that did not exist before Bitcoin. Until now, the Internet – or the digital per se – was more known for creating data in abundance. Anyone who sends e-mails sends de facto copies of a file. Those who dow nload documents from the cloud download copies; the list could be continued.
One of Satoshi’s key innovations was the invention of digital scarcity. Although the Bitcoin blockchain can be multiplied infinitely, there will never be more than 21 million BTC. If you don`t have money to buy some, earn some – read how at infonews.co.nz.
Solution to the Double Spend Problem
- Digital signatures are part of the solution, but the most important benefits are lost if a trusted third party is still needed to avoid double donations. We propose a solution to the double-spending problem by setting up a peer-to-peer network.
- Satoshi Nakamoto’s Bitcoin Whitepaper was the first solution to the so-called double-spending problem that works without third parties. Double spending describes the process of issuing the same digital unit of money to two or more addressees.
- What cannot be physically done with cash, can only be prevented in digital space by complex mechanisms. SEPA, for example, is the European interbank solution to the double-spending problem; however, it only gets by with trustworthy third parties – banks.
Bitcoin, on the other hand, achieves final and irreversible payment processing without any third parties. Bitcoin’s peer-to-peer structure is therefore most comparable to digital cash.
Nic Carter sums up this characteristic in medium terms:
I tend to think that the interesting thing about Bitcoin is the ability to transfer value over a communication channel with extremely high reliability.
Transparent value memory
Funds are an abstract construct of human cooperation. Beside many other characteristics (divisible, fungible etc.) money should be scarce first of all. Nick Szabo summarizes this characteristic with “counterfeit-proof preciousness”, which must be inherent in money.
For value stores, this is the central property: goods that abound are not suitable as stores of value. Because whenever their price rises, the market is likely to be flooded.
An increasing demand for Bitcoin – i.e. adaptation – will be reflected 100 percent in the price. Even if mining activity rises as a result, the amount of BTC available cannot be increased. Bitcoin is indeed digital gold.
The separation of state and money
A narrative that has recently enjoyed some popularity in Bitcoin circles is that of sovereign money. Because BTC does not allow itself to be controlled by the state as much as central bank money. It is conceivable that one day central banks or states will own Bitcoin. However, they will not be able to influence the fate of the No. 1 crypto currency to a greater extent than all other network participants. Bitcoin is the first form of money that can thrive decentrally, globally and above all without state manipulation.