Bitcoin is a global network of value transfers [Crypto indexing part 6]
What the internet did to transferring information, cryptocurrencies might do to transferring value.
This is a bold claim, so let us compare the internet with cryptocurrencies by comparing email with Bitcoin.
Sending messages via email (Bitcoin) was the first real application of the internet (cryptocurrencies). If Alice wants to send an email message (Bitcoin payment) to Bob, she must know his public address. For this reason, there were initially only a handful of users and very few emails (payments) sent. Usage was concentrated to people with a lot of technical skills and interest in computers, as the difficulty of sending messages (payments) were so high. The ease of use increase with time, allowing less technical people to use it too. Surely it is beneficial and intellectually satisfying to understand the inner working of email (Bitcoin) but it is not necessary in order to use it.
For Alice to send an email message (Bitcoin payment) to Bob, she must not only know his public address but also her own password (private key). This security feature ensures that only she can send information (value).
To send and receive emails (payments) it does not matter which country Alice or Bob is in — -the reach is global. Moreover, it does not matter if they are human — -the technology works if the protocol is followed. Before email (Bitcoin) only humans could send information (value). The fact that computers can do it introduce the possibility for automation.
Before email (Bitcoin) there were different networks depending on what type of information you wanted to send (where to send the value). Multiple networks existed, such as fax for documents and telephone for audio. With the introduction of the internet (cryptocurrencies) all these networks were united.
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Jacob Lindberg, the author of this post, is the founder & CEO of Vinter — an index provider and data analysis firm specialized in cryptocurrencies.
This blog post is a part of our intro blog series on crypto indexing. Read part 7 here
