Hello my friends, and welcome, if you don’t know me, my name is Andrin. I research topics in the blockchain world and present them to you in easily understandable videos on YouTube. And, of course, I will never stop asking.
In this series, we go through every single one of the top 100 projects on Coinmarketcap.
● Bitcoin first appeared in the world in October 2008 in an online forum.
● A White paper was posted by a person or group by the name of Satoshi Nakamoto, he remains anonymous until today.
● The White paper describes the idea and the vision behind it. The title was: “A Peer-to-Peer Electronic Cash System”.
● Every Bitcoin transaction is verified globally by thousands of computers, instead of banks and governments.
● Each time a Bitcoin is sent from one person to another, it is recorded in a public database. It’s called a blockchain.
The invention of blockchain technology could turn out to be the biggest innovation in human history since the start of the internet itself, maybe even bigger.
To understand Bitcoin, we have to understand Blockchains first.
For me, the following example helped the most:
In today's world, there are two major things humans exchange with each other:
Here is an example:
1. John sends a photo, a text, a video or audio to Peter. Now John and Peter have it. Both can send it to even more people. The information gets copied. All participants have the exact same file.
2. John sends “value”, for example money, to Peter. It better not be a copy. Money can be either here or there. It can’t be in two places at the same time.
However, “value” can be a lot more than just digital money. It can also be stocks, options, loans, dividends, commodities, art, contracts, in-game items, real estate, loyalty points and many more examples.
The internet is the global standard for the exchange of “information”. But the internet is not very good for the exchange of “value”.
Before the internet, we had private networks, like the “Intranet” in a company. Those were already useful networks, because you could send messages to your colleagues, you could share files, you could do many things — but all within your private network.
Then, the Internet was invented in Switzerland. The global Internet protocols changed everything, because it connected each and every person on this planet who had access to it and allowed them to easily exchange information.
Before that, all those networks were isolated networks, or data islands.
However, what we didn’t have for a long time was a global database for the exchange of “value”. This....ladies and gentleman... is where the blockchain will change the world.
Up until this time the world needed to rely on middlemen (like banks) to exchange value, as it wasn’t easily possible to keep track of value ownership collectively, globally and securely.
Think about the thousands of banks that exist today. Think about Paypal, Wise, Revolut, stock brokers, stock exchanges, Visa, Mastercard, and all the players in the finance sector.
It used to take days to send money from one country to the other. They all operate their very own databases for value and track all the users’ funds in their own data islands. They are now connected through something called APIs with some other players in the industry so the person can send some kind of “value” to someone else. Sounds complicated? It is. That’s why everything takes so long and is so expensive.
Now, think about all the other digital value that is out in this world, but is not at all connected to anything. Digital art, digital in-game asses, loans, even digital loyalty points.
Imagine a world in which there would be one single global database, but not for information, but for value. Imagine this one big global bank, which is not controlled by a company, but by millions of people just like me and you. This is the potential of blockchains.
At its core, Blockchain is nothing else than a public database, the new global standard that enables the exchange of “value”, just like the internet was the global standard for the exchange of “information”.
It will make the exchange of different kinds of value a lot faster, cheaper and easier.
This is Web3. This is a revolution. Not now, but in a few years.
Now, let’s go back to Bitcoin:
Bitcoin was the first use-case of a Blockchain.
It was the first time you could send some kind of value or money from point A to point B, without the use of a bank or without the need to trust a middleman company.
This doesn’t make Bitcoin good or bad. And it doesn’t tell us if Bitcoin will go to zero or to a million. But it’s important to understand the technology behind it.
The Bitcoin Blockchain went live in 2009
Based on the Whitepaper, it was intended to be digital cash.
Today, people see it more as digital gold and not as a currency in the traditional sense. The reason for this is that there can only be 21 million coins. People started to speculate, kept the Bitcoins, instead of spending it.
Historically, humans and governments have been fairly bad at creating money. Theoretically, governments can print endless amounts of money, and most currencies don’t survive more than 100 years.
Some people believe in Blockchains, but not in Bitcoin. Others believe in Bitcoin, but not in any other cryptocurrency out there. And yet others are convinced Bitcoin turns into some kind of settlement layer that the world trusts.
Personally, I don’t know. I am Swiss, so I am neutral on this. But I think it’s worth reading and learning more about it.
In the next episode, we will look at ETH and the Ethereum Blockchain. The second biggest project out there.
Having said that, I wish you all a great rest of the day, to the moon, and... Never Stop Asking.