Bitcoin is one of the most important inventions of the last 20 years. Unless you are a computer scientist, you may not know that the concept of a decentralized network that could achieve consensus (agreement) without any central controlling authority was an unresolved problem in computer science called Byzantine Generals' Problem. Bitcoin solved this problem in 2008 and that in itself is truly revolutionary.
Bitcoin developer Andreas Antonopoulos said "I discovered Bitcoin for the first time in 2011 and, since the Internet, I have not felt this feeling of being completely overwhelmed by the possibilities that I saw. I was there at the dawn of the Internet in 1991 when it was pre-commercial. And I could see that this was going to change the world but couldn't tell everyone around me because no one believed me. And I have that exact same feeling about Bitcoin."
Ignore the price. Ignore Bitcoin the money and understand Bitcoin the technology, the invention, and the network it creates. Because if we mess up the money we'll just reboot another currency. The invention of Bitcoin, the technology that makes it possible, cannot be un-invented. And it creates the possibility for decentralized organization on a scale never before seen on this planet.
Today in the world approximately 1 billion people have access to banking, credit and international finance capabilities. Primarily the upper classes and the western nations.
6 and a half billion people on this planet have no connection to the world of money. They operate in cash based societies with very little access to any international resources. They don't use banks. 2 billion of these people are already on the Internet. And with a simple application download, they can immediately become participants in an international economy using an international currency that can be transmitted anywhere with no fees and no government controls. And they can connect to a world of international finance that is completely peer to peer. So
Bitcoin is the money of the people. At its core Bitcoin is simple mathematical rules that everyone agrees on with no controls. The possibility of bringing 6.5 billion into productive society by connecting them to the rest of the world is truly revolutionary.
First we're going to start affecting the payment processors; these enormous companies that make it more expensive to send money the poorer the destination country is. A situation that is exploitative and corrupt. And these organizations make enormous amounts of profit for a function that can be done in Bitcoin for free! So, as the adage of the Internet once went, "I just replaced your entire industry with 100 lines of Python code." And that is the case with Bitcoin.
One of the most important principles of the Internet is neutrality. The Internet doesn't know the difference between CNN and an Egyptian blogger. Likewise Bitcoin is neutral to sender and recipient and also to the value of the transaction. And it also gives every citizen and user of Bitcoin the same ability to innovate in terms of financial innovation, in terms of payment systems and use the currency with exactly the same facility that a bank has. YOU can become and operate on the same level as Citibank.
It takes a hierarchical system of international finance that up to now has achieved security by limiting access (since that is the main system of trust on our payment systems; you can't get in unless you're vetted) and it turns that on its head and creates a completely flat and decentralized network where every node is equal and the protocol is neutral to any and all transactions. And pushes innovation to the edge of the network. This allows the same phenomenon we saw on the Internet:
Innovation without permission. You don't need to ask anyone if your application can be published on the Internet. You don't need to ask anyone to completely subvert a new industry with your information technology. With Bitcoin you don't need to ask anyone to invent a new financial instrument, a new payment system or a new service. You can just do it. You can write the code and you are now part of an international financial network that can run that code and put you in contact with millions of consumers.
It's still early days. We do not yet have the polished interfaces. It's difficult to use. It's used by criminals. It's not exactly easy to see who is using Bitcoin. We've heard all of that before. The Internet circa 1991 was a den of thieves, pirates, pornographers and criminals. Right? But it didn't matter. And it doesn't matter now. And the reason it doesn't matter is because
the same power of the technology that can be used by a criminal to promote their criminal activities can be used by all of the rest of us to do good; to do incredible things all across the world. And there is more of us than them.
Bitcoin creates this environment that is ripe for innovation. Because its not just a currency. It's a technology, a network, and a currency. Yes the value has substantially increased over time but we shouldn't focus on the price. If Bitcoin crashed tomorrow morning the technology is still revolutionary. Just like if a website fails on the Internet or an application fails on the Internet, the Internet doesn't go away. So if you understand that Bitcoin is a technology and not a currency you can grasp the importance it has. Yet it should not be about us. It is about the other 6.5 billion people on this planet. It is about the ability to bring to the world a level of financial innovation it has never seen before. It's bigger than a price. Bitcoin can and will change lives.
It's not going to be easy. When you throw a disruptive technology into the middle of the most powerful institutions on the planet - they don't like it. And right now we're still in the early stages. To use the trite expression "first they ignore you, then they laugh at you, then they fight you, then you win". We're still at the laughing at us stage. And that's quite alright
Because by the time they get to fighting us they've already lost. Because this technology just went global. There are 193 currencies in the world yet there is now a new international currency; a mathematical decentralized cryptocurrency called Bitcoin. And we're going to build more. Cryptocurrencies are going to be a mainstay of our financial future. They are going to be part of the future of this planet because they have been invented and it's as simple as that. You cannot un-invent it just as you cannot turn an omelette back into eggs. There are many other alt coins out there that use the same basic technology. Bitcoin is the Internet of money and currency is only the first application. At its core
Bitcoin is a revolutionary technology that will change the world forever.
A special thanks to
Andreas Antonopoulos.
EDIT: Added link to video discussion that was transcribed (but not exact) which also covers other topics such as micropayments. You can also learn all about the protocol
here at Khan Academy. More in-depth discussion with Andreas can be viewed
here (beware of the background noise as it was recorded in a restaurant over a meal) and I also recommend
this recent interview with TastyTrade covering more financial topics that also refers to the previous video
