We continue our foray into the World of Cryptocurrency as we trace the origins and concept behind Bitcoin, which is fundamental in understanding Bitcoin’s significance to our Civilization at large.
The most important aspect of Bitcoin is the concept behind it.
Bitcoin was created by developer Satoshi Nakamoto.
Rather than trying to design a completely new payment method to overthrow the way we all pay for things online, Satoshi saw certain problems with existing payment systems and wanted to address them.
The concept of Bitcoin is rather simple to explain: During the financial crisis of 2008, people from all over the world felt its debilitating economic effects. And at the time of this writing (early 2016), many are still feeling the effects in terms of the dwindling value of their fiat currency (the currency approved by a country’s government).
As the global financial system teetered on the brink of collapse, many central banks engaged in quantitative easing — or in simple terms, turned on the printing presses. Central banks flooded the markets with liquidity and slashed interest rates to near zero in order to prevent a repeat of the Great Depression of the 1930s.
The effect of this was large-scale fluctuations in fiat currencies and what has since been termed currency wars — a race to competitively devalue so that an economy can become more viable simply by its goods and services being cheaper than those of its neighbors and global competitors. The response of central banks around the world was the same as it always has been when these things happen: Governments had to bail out affected banks and they printed extra money, which further devalued the existing money supply.
In bailing out the banks, there was a net transfer of debt to the public purse, thus adding to future taxpayer liabilities. This created a sense of social injustice among some quarters.
What seemed clear is that central bankers, supposedly acting independent of governments, were taking many economies into the unknown and were prepared to devalue their fiat currencies at will just to keep the wheels turning. In doing so, they bailed out the very same institutions and bankers whose reckless behavior had brought about this crisis in the first place. The only other option would have been to let the whole system collapse and be purged, as for instance happened in Iceland. That country defaulted on its debt and endured great economic turmoil in the aftermath of that event.
Therein lies the genesis of Bitcoin: a decentralized financial system taken out of the hands of a few elite global decision-makers.
Satoshi Nakamoto decided it was time for a new monetary system, one so different from the current financial infrastructure that you could even call it a disruptive force.
Viewed from this angle, Bitcoin could be said to have a driving ideology. It is about so much more than just using the associated coin as a payment method. It is about using the underlying technology and discovering its full potential over time. How you decide to use that technology is completely up to you. It can be adapted to fit nearly any financial need you can imagine. All you really need to do is be open to the technology itself. Even though you may not grasp the entire concept from the start, just keep an open mind.
The mainstream financial infrastructure is flawed, and a viable alternative is more than welcome. Whether or not that alternative will be Bitcoin remains to be seen.
When Satoshi Nakamoto came up with the idea of Bitcoin, one key factor was destined to play a major role: decentralization. Decentralization means everyone is part of the Bitcoin ecosystem contributes to it in their own ways. Rather than relying on a government, bank, or middleman, Bitcoin belongs to everyone, in a system called peer-to-peer.
Its much like returning to the days of Barter Trade where individuals determined the value of goods for the purposes of transactions, instead of working within the framework of an imposed Fiat Paper currency which is inherently unstable and subject to external manipulation.
Without individual users, there is no Bitcoin. The more people embrace Bitcoin, the better it works. Bitcoin needs an ever-expanding community who actively use it as a payment method, either by buying goods and services with Bitcoins or offering goods and services in exchange for it.
Due to the digital currency’s free market spirit, anyone in the world can set up their own business and accept Bitcoin payments in a matter of minutes. Plus, existing business owners can offer Bitcoin as an alternative payment method, with the potential to expand their customer base on a global scale.
It’s easy to do your Bit(coin) and get involved.
Despite Bitcoin being credited to Satoshi Nakamoto, his identity remains unknown but the significance of his idea cannot be denied….In our next piece we’ll look at the Blockchain Technology underlying Bitcoin, and what its implications are for Humanity and Civilization itself.
In the meantime, you can check out the Documentary ‘The Bitcoin Gospel’ and more on our YouTube Channel’s ‘Freedom Ave’ Playlist.
We’ve also added POY’s Afrobeat inspired new Music Video ‘Love You’ so you can have something new to vibe to…Peep the links below for more on Bitcoin’s origins and its mystery creator Satoshi Nakamoto.
Links & Credits