Am I the only person who doesn’t know what Bitcoin is?
Bitcoin, Blockchain and how I Alleviated my Migraine
Sounding smart is a terrific past time. It makes you look good in class, job interviews tend to go splendid and if you have glasses, people will think you’re a genius when in actuality most of your intellectual exploits involve trying to catch every single Pokemon.
Thing is, to sound smart, you actually need some knowledge. Don’t confuse this with being smart: no, at most I’m talking about the ability to regurgitate common talking points. The latest subject that I’ve decided to add to my library of brain knowledge is Bitcoin.
I’m proud to say I have a lot of smart friends. In, fact that’s another way to seem smart: intelligence by association. Lately, they’ve all been talking about “Bitcoin” and I realized I’m the only one out of them who doesn’t know much about it. So, I decided to search what “Bitcoin” was, and found this concise explanation by Timothy B. Lee of the Washington Post:
Bitcoin is an online financial network that people use to send payments from one person to another. In many ways, Bitcoin is similar to conventional payment networks like Visa credit cards or Paypal.
So, Bitcoin is not just a type of currency, but also a way to transfer payments before people. Much more illuminating than how I defined Bitcoin at first:
Bitcoin is that thing that’s online, and if you invest in it you get rich. You know, the internet?
Through my research, what really seems to be attractive about Bitcoin isn’t necessarily just the idea of the currency, which as of July 7th 2017 is worth about $2546, but more that the way the financial network is structured. It’s distributed through a Blockchain system, which is a fancy way of saying that it’s a system that everyone can access and not one person can control. Blockchain allows everyone to join the system and transfer Bitcoin, other cypotcurrencies and all sorts of information directly to another entity as opposed to copies being sent. It’s a “shared public ledger” where all your transactions are recorded. It’s a big database that’s governed by the transactions you make, not by a large entity like a bank.
So what’s that big deal? Well, Blockchain’s decentralized system gives it two qualities you can’t really say that any other network has:
- Transparent: All transactions are recorded when they happen. No credit cards of banks reviewing charges. Once it happens, the blockchain network makes a record through exchanging the information.
- Indestructible: Theoretically, because of the nature of Blockchain, there cannot be on point of failure. The amount of power to bring down the entire network in unfathomable.
In regards to the value of Bitcoin, as in the actual currency, a lot of big names are split. Billionaires like Warren Buffet and Mark Cuban think at most, it’s a bubble that will burst eventually. One Wall Street strategist says that in the next 5 years, one Bitcoin could jump over $55 000 in value and become a better investment than gold. Whether you are a believer or not in the currency, the Bitcoin website has some things to keep in mind if you are interested in investing:
- It’s volatile! Bitcoin is new, and that makes it exciting, but it also makes it unpredictable. It can fall and rise rapidly, and should be considered a high speculation, high risk investment.
- It’s still changing. The technology is still being developed, and that can mean some updates can bring good effects, bad effects or both to the Bitcoin marketplace.
- Know who you’re doing business with. Once a transaction is made, the person you sent your funds too is the only person that can refund it. Do your best to protect yourself and your assets.
Now this covers a very small portion of what Bitcoin and what Blockchain are, and what they will be in the future. In terms of succeeding in appearing smart, this should be enough to get you through a cocktail party. However, if you’re interested in more content on Bitcoin, Blockchain and Cyrptocurrency besides the one’s linked to in this article, here are some interesting pieces and projects worth checking out:
- A 26 minute video crash course on Bitcoin and Crypotcurrency
- Polybius: The world’s first crowdfunded bank
- Ambisafe: A Blockchain asset platform
- “The Truth About Blockchain”
- A piece on the enigma that is the inventor of Bitcoin
After you absorb this content, on the off chance your mind blanks in the middle of a cryptocurrency conversation, just make sure to adjust your glasses and end on “It’s quite an interesting technology”. It won’t hurt if you mention you read The New Yorker as well. Welcome to the world of sounding smart.