3 minutes reading time (640 words)

Bitcoin Is Not What You Think It Is

A Bitcoin transaction using the blockchain. (Image from Khan Academy)

Check your Bitcoin "wallet". What do you see? You see that you have an "account". You see a "balance". You see "Send" and Receive". It looks like, well, any normal bank account or digital wallet out there. Bitcoin seems to be just a slow, clunky, and weird "payment" solution for geeks and anarchists.

But, when you look at the Bitcoin software and code, none of those things are there. Instead of a "balance" you have unspent transaction outputs. Instead of "coins", you only have keys. There are no senders, you have inputs, no receivers, only outputs. All you see are cryptographic hash functions, transaction elements, public and private keys, and a few other things that would never be found in your bank account.

The basic building blocks of the Bitcoin protocol, to a smart enough engineer (Satoshi, if you're reading this, thank you) just happen to be perfect for building a trust-minimized, censorship-resistant, digital value transfer protocol, a new kind of money unlike anything the world has ever seen before. The basic elements that make up this software protocol make it a perfect candidate for a digital money transfer system that doesn't require a central authority to validate transactions. 

Bitcoin Is Not What You Think It Is

It's not "just" a fancy payment system, in the same way the internet is not just a fancy telephone.

In the near future, we will laugh at how we fumbled around with this technology by trying to fit it into the existing systems today. Right now we keep building wallets, we keep building money transfer services, we keep building exchanges to trade digital currencies, but that's exactly what happened to the early internet.

I mean, look at this two-minute video from 1981 about how the news was supposed to work on your computer. It took two hours to download the whole text, and they charged you $5 per hour to use the internet. Why would anyone want to read their news on a computer?



 Or the how experts said early automobiles won't replace horses:

“Automobiles are useless in the winter time.” Full article here.
Even the inventor of the telephone couldn't grasp its massive potential:
Image from AZquotes.com

After cars were introduced, it took many decades before everyone even agreed to add seat belts inside them. After the internet was introduced for military purposes, it took decades before we figured out how to use it beyond using it as a fancy telecommunications machine or electronic mail delivery system. The world wide web was introduced in 1993, many years after email, and even then, the early internet looked like fancy newspapers and bulletin boards. It took almost 2 decades for things like social media, uber, airbnb, to become mainstream.

It's like using a horse to pull a car.

It's like building a magnetic levitation hypersonic bullet train and putting it on old locomotive railroad tracks.

We have only begun to scratch the surface of what is possible with the technology that Satoshi Nakamoto gave to the world. This 200 billion dollar market that emerged in its wake is still just a tiny wave in the ocean of finance and technology, just like how a tsunami looks like a tiny wave out in the open ocean. It's got momentum, and is accelerating at a ridiculous speed towards the shore, yet most will only see it coming when it is too late. 

The real potential of Bitcoin, an anti-fragile truth machine, algorithmic and agnostic monetary base, and public transaction network for all of humanity, is only limited by our imagination and creativity. We need to reimagine the context of how we store, transfer, and exchange value with one another. We have to keep thinking out of the box and never stop building.



 

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest. Sign up or login to your account.
Rate this post:
Attachments (0 / 3)
Share Your Location