- In this article:
- What is Bitcoin?
- Who created Bitcoin?
- 2008 Financial crash.
- Blockchain Technology is now the middle man.
Bitcoin is an alternative digital currency that came about after the crippling 2008 financial crash. A whitepaper released by an unknown person or group calling themselves Satoshi Nakamoto suggested a new digital currency that would allow people to take ownership of their own money and pay someone directly, bypassing the very institutions that caused the abuse.
Digital currency has been around since the 1970’s and today we use it in the form of a plastic card such as a credit card or store card so physical printed money has decreased over time. The ones and zeros reflected on a digital screen, validated by a bank, is the only way one person knows they have more financial value over another. In essence, there is no physical money anymore and only an agreement by one party with another party, validated by the banks that an exchange of money has taken place.
But what if there was another system that could validate these transactions? What if there was a third party not controlled by any one person or institution in particular? This is where the technology behind Bitcoin, The Blockchain comes in.
Bitcoin is nothing more than a ledger; think of it more like a Google Sheet that everyone has access to. Special computers on the Bitcoin network, known as Miners, use Blockchain technology, become the middlemen that replace banks to validate transactions. Every Node has to solve a very difficult mathematical problem in order for the transaction to be confirmed. If a Node picks up that something has gone wrong with the transaction, it is flagged for all other computers to double and triple check the transaction.
What makes Bitcoin so different from a traditional bank is that every confirmed transaction is then added to the spreadsheet (ledger) and is the distributed throughout the network, unlike a bank that would be the “keeper” of that ledger.
Since it’s inception, Bitcoin has grown exponentially and is being accepted by more and more people as faith in governments, greed in corporate and a general feeling of accountability within ourselves begin to rise. As awareness about Bitcoin is spread and trust is earned in the The Blockchain technology it is proving itself as a replacement of the middlemen.
So signficant is Bitcoin and The Blockchain technology that the major banks of South Africa decided they would go all-in on Blockchain Technology in 2017. Like the music industry and like the publishing industry, they know they will lose to peer-to-peer technologies like Bitcoin.
At Leaderless, we encourage the letting go of old ways of thinking to allow new possibilities to innovate so that we can take ownership of our own lives. The hardest part of understanding Bitcoin is letting go of the way financial systems currently work to pave the way for something new. Naturally, people find change difficult because change brings about chaos but Bitcoin is growing fast and the more it is accepted, the quicker people will start using it.
If money is nothing more than an agreement between two people, why would we not adopt a new system of finance where the responsibility is placed in the hands of the people.
In our next article, we will explain how you can get started with Bitcoin.