Central banks Since I started learning about bitcoin as an alternative to traditional paper money, I have often wondered why we have come to accept banking as it is constituted today. There are lots of problems with the current banking system but we are so conditioned to it that we don’t consider it’s problems to be problems. We accept all the problems with banking to be normal. Is it normal that a signed cheque should take days to clear? Why is it expensive to send money from the west to developing countries? Why do banks close at a certain time? Why is access to my own money controlled by institutions like banks and governments? Central banks decide how much money to print and put into circulation. They are causing financial exclusion by their actions. Is poverty a conscious decision made by banks and those who control them? There are many questions that need answers but most people have never thought to ask. We have never realised there are problems until bitcoin started solving them. Fiat currency Fiat currency is backed by the trust we place in the government issuing it. When we begin to lose trust in the issuing authority, then the currency crumbles like a deck of cards. Fiat currencies have crumbled in many countries including Zimbabwe. The question is why? Why do we lose trust in government and central banks? Their decisions have caused financial exclusion. There are billions of people across the who are either unbanked or
I’m excited to share with you that my favourite editing app Grammarly, has now got a smartphone keyboard which I’m using right now for this blog post! One of the things which have slowed me down in the past is that after typing an article in any app, I would then have to export it to Grammarly on my desktop so I can either use the web version or the desktop app. Now that Grammarly has a smartphone application, I can use to write my blog within the blogging app. Right now I’m blogging within WordPress. I’m super excited to share this information with you. Let me know in the comments what application you use for editing. The images are from www.pixabay.com.
Every transaction between people is compromised by lack of trust. The Blockchain eliminates the need for trust. It is the trust protocol. The blockchain is a decentralised public ledger with private keys which eliminates the middleman. It is built with encryption in mind. It replaces the need for a trusted third party. For that reason, it is a threat to the traditional government and banking institutions because they have acted as the trusted third party for generations. The blockchain takes responsibility away from the banks and every organisation which has acted as a go-between when two parties enter into a transactional relationship. Governments are looking at ways to regulate the Blockchain. There are challenges with this. The Blockchain is decentralised. It has no point of vulnerability.
The future of human interaction is on the blockchain. The blockchain is the revolutionary technology which replaces the middleman as the guarantor of trust. The blockchain is the trust protocol. It is a public record of transactions of any kind with private keys for access. The network guarantees that the Information on the blockchain cannot be changed without the consent of the system. Nobody can change the records, and new entries are verified and added to existing files through consensus. If you buy a coffee using bitcoin, the history cannot be compromised; it is a permanent record. Many of the people who are asking questions about bitcoin have been told that there’s money to be made with bitcoin. It is true that some people have made money. But it is equally valid that others have lost, especially speculators who don’t understand how the bitcoin market behaves. Successful investors are in it for the long term. The value of bitcoin and other cryptocurrencies has been going up over the long run. For me, it’s not just about the bitcoin and cryptocurrencies, but it’s about the blockchain. The blockchain is the technology behind the bitcoin. It is also the technology behind all the cryptocurrencies and tokens. This language is jargon to many people, but it is the new jargon of money and value transfer and accounting. It is a protocol or a system of rules which eliminates the centralized nature of traditional institutions such as banks and governments. The blockchain puts decision
The mining of bitcoin is done to secure the bitcoin network. Securing the network means authenticating bitcoin transactions by consensus of the bitcoin miners. When you buy a cup of coffee using bitcoin, the transaction is broadcast to every bitcoin miner on the bitcoin network. The miners simultaneously start the process of authentication. The transaction is presented as a mathematical problem which must be solved to authenticate the coffee transaction. The miners compete to solve this problem. The miner who solves it first gets rewarded through bitcoin. Mining is one way of getting bitcoin. You can also get bitcoin by buying it or having someone send it to you. The miner who solves the problem First helps to validate the coffee buying transaction. Every transaction made using bitcoin is validated using this method. The process of mining uses up a lot of electricity and requires special computer hardware. The electricity bill for mining a single bitcoin could be as much as the bill for the entire month for a small household. Only 21 million bitcoin will ever be mined. The bitcoin mining process is designed so that it becomes increasingly more difficult to mine bitcoin as the 21 million figure is approached. The inherent difficulty is to mimic the scarcity property of a currency. If you have any questions please ask in the comments section. SaveSave