Bitcoin and Blockchain – A New Backbone for Human Trust





▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io

An animated film about Bitcoin and Blockchain by Nini Skarpaas Myhrvold and Espen Jan Folmo.

As Archimedes once said, give me a fixed point and I will move the whole world.
Due to fake news, manipulated idoles, and corrupt politicians, reality seems built on sand. Bitcoin and blockchain holds the promise for providing humanity with a mathematically precise backbone for trust. Such a fixed foundation may be likened to the wise man who built his house on the rock, and serve as a common ground to face the rain, floods and winds in our shared quest to heal and evolve as a human species.

The invention of the World Wide Web radically changed our reality in terms of informational flow. However, in terms of transferring value or ensuring trust, there is still a great potential for improvement. The internet is a dangerous place, where passwords are broken, identities stolen, and bank accounts hacked. This is because as soon as something is digitized, it can easily be replicated or forged. This is why we put our trust in third parties to store our sensitive information, and to secure and verify transactions. This also allows for misuse and censorship.

As a revolutionary solution, Satoshi Nakamoto – an unknown person or persons – introduced blockchain technology, as part of inventing Bitcoin, also called the internet of money. This technological breakthrough will change the world as much as the internet, electricity, and the steam engine according to MIT professor Christian Catalini. With the introduction of blockchain technology, intermediaries like lawyers, brokers, and bankers might no longer be necessary in their current form. Their future role may largely involve embedding analog information into the digital realm of blockchains – bridging the old and the new world by translating their expertise. Individuals, organizations, machines, and algorithms will transact and interact with costless verification.
Economic value results from a shortness of supply. Due to its mathematical nature, Bitcoin is even more scarce than gold, an element only created when stars explode. Before the invention of Bitcoin, there was no way to create digital scarcity.

This movie outlines what blockchain is, why it matters, and how it could improve the world – including mitigating the climate crisis – but first and foremost, it shows why we believe Bitcoin is digital gold. It shows how a new digital gold standard would disallow taxation by governments printing money, slow down consumption, and encourage future-oriented savings – at the same time banking the unbanked and making transactions unhackable, uncensorable, and transparent. In order to appreciate why Bitcoin is a form of improved gold, let us first take a look under the hood at how Bitcoin actually works:

Bitcoin essentials:

This video will contain a lot of stuff that may be difficult to grasp, but if you want to catch up with the future, it is necessary to understand this to some degree, so why not get a lead on most people? Let’s dive in to see if we can make more sense out of this. For those of you wanting to really understand this, I would recommend that you search the internet deeper for these following terms:

Blockchain
Cryptocurrency wallet
Hashing
Private/public key
Nodes
Decentralized
Mempool
UTXO
Miner
Incentivized finance
Proof-of-Work (POW)
Nonce
Cryptographic puzzle
Target
Bitcoin Reward
Halving

So, first of all, what is blockchain?
A blockchain is a digital record of transactions. The name is derived from its structure, in which individual records, called blocks, are linked together in a single list, called a chain. Blockchains are used for recording transactions made with cryptocurrencies, such as Bitcoin, and also have many other applications.

Blockchain technology is based on the concept of hashing. Hashing means taking an input of information of any length and producing an output of a fixed length. You can find several sites on the internet that will hash information for you. Here, we can enter our text or a file, and through encryption this information will be compressed into a unique hash. Bitcoin uses the SHA-256 hashing function; here, we click the “Hash” button, resulting in this (see video). It is a one-way function, meaning that the original text cannot be restored from the hash.

▶ Coinbase Website: Coinbase.com
▶ CEX Website: cex.io



Youtube version

Spread the love

Related posts

Leave a Comment