Most people i know are in Bitcoin for fiat money. Also look at company’s buying Bitcoin to make huge profits. This brings up a lot of questions in my mind like, has Bitcoin failed? Where is the Vision of Satoshi Nakamoto? Doesn’t this make Bitcoin worse then fiat money? Don’t get me wrong i also hold Bitcoin but the questions are there floating in my mind. And i need to throw them into a blog.
These questions have become more and more prevalent in recent weeks as I read more and more stories and blogs about Bitcoin will explode towards a 100,000 dollar or even to a 300,000 dollar. The fomo is also indispensable for this bull run. For example, people often only want to be able to make more fiat money. Of course there is nothing wrong with this, but this means that the vision of Satoshi Nakamoto is underexposed.
What is the vision of Satoshi Nakamoto?
On October 31, 2008, Satoshi Nakamoto published the Bitcoin whitepaper. Satoshi Nakamoto is a pseudonymous person or persons who developed bitcoin. A whole separate blog can be written about who Satoshi Nakamoto is.
Satoshi Nakamoto's vision was to intensively change the banking system. There had to be an alternative payment system to free both people without a bank account and people with a bank account from existing money systems.
today Bitcoin is used as a speculative investment. This has resulted in many fights between Bitcoin, BitcoinCash and BitcoinSV, for example. The vision Satoshi Nakamoto had has almost disappeared and been forgotten. Nevertheless, it is necessary to place a nuance here. Bitcoin is still used to make payments between people and between people and businesses.
The Bitcoin white paper says:
Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power.
What is Proof of work?
The Proof of work system is the best known Blockchain consensus algorithm that everyone in the crypto space knows. It was conceived to be able to combat DDoS attacks. At Proof of work everyone thinks about the creator of the Bitcoin Satoshi Nakamoto. This is not entirely right, because the Proof of Work protocol is an idea of Cynthia Dwork and Moni Naor and was published in 1993. No, I didn't know that either! That's why I thought it would be a good idea to mention that. In the white paper from the Bitcoin from 2008 the concept of Proof of Work comes out well and in my opinion is actually the greatest idea at that moment ever.
This consensus system ensures that Bitcoin no longer requires a third party to send and receive payments. This means that the third party in this story is the bank for convenience. Banks keep a register of all cash flows. At Bitcoin, everyone has a copy of this register. There is no need for a third party to arrange this because everyone can view these registers and verify all payments.
This protocol does have a number of requirements for it to work properly. For example, heavy calculations have to be done and these calculations are becoming increasingly difficult. And so more and more computing power will be needed. This means that you need more and faster computers. This is called mining in the crypto space.
This mining is necessary because:
- The transactions must be verified in a reliable manner.
- And it is necessary to be able to make new Bitcoin. Or other cryptocurrency that also works through proof of work.
As you now know, mathematical puzzles must be solved to meet the above 2 points. This means the first to solve such a mathematical problem is assigned a new cryptocurrency.
A disadvantage of Proof of Work is:
- It takes more and more power (energy) to make these calculations. This is a shame as they are often useless calculations.
- And it can be seen as unfair because not everyone has the knowledge, money and time to mine.
The white paper says the following about proof of work:
We have proposed a system for electronic transactions without relying on trust. We started with the usual coin framework made from digital signatures, which provides strong control over ownership, but is incomplete without a way to avoid double spending.
To fix this, we've proposed a peer-to-peer network that uses proof-of-work to record a public history of transactions that quickly becomes computationally impractical for an attacker to change as honest nodes controlling most of the CPU power.
Where do we need to go?
Which, in my opinion, is the best option to end the debt principle on which our money systems are based on. Creating money from nothing that is done by (central) banks and governments. Worst of all, our money isn't even backed by anything else. It is basically just paper and metal with mental value. Kind of like what a fool think its worth principle.
Now Bitcoin could have changed this by being a decentralized cryptocurrency to some extent. This makes Bitcoin more difficult to manipulate. Bitcoin and blockchain are designed to be neutral. To create a so-called decentralization and stability. Bitcoin can therefore also be used as a reserve currency to replace gold and silver, for example. The idea that anyone could download the entire bitcoin blockchain and thus be their own bank is still the best idea in the crypto world in my eyes.
Furthermore, we should not support alt coins that are only used out of greed and to make more fiat money. So it should primarily be about creating a fair system that is stable, neutral and unmanageable. But I'm afraid the greed in the world isn't going to make it any easier.
Other coins are trying to do the same a Bitcoin.
A lot of coins and tokens have emerged after Bitcoin. With very bad ideas and maybe life-changing ideas. For example, the idea of Sathosi Nakamoto has also become further underexposed. The blockchain idea is no longer just for peer to peer payment system anymore. The techniques that are immensely popular, for example, are smart contracts and DEFI. This also shows how much can change in 10 years after bitcoin was created.
Of course there are also alt coins that try to imitate Bitcoin. There are also so-called stable coins, most of which are still based on fiat money. As a result, you cannot speak of a decentralized peer to peer system. There are also alt coins that try in a different way to create a stable coin such as amplforth.
But none of them have yet succeeded in making Sathosi Nakamoto's vision come true. Fortunately, we have not completely strayed from this vision. That in turn gives me hope. Because we need a stable, decentralized and unmanipulated currency.
I certainly do not own the truth. I am trying to initiate a discussion here that makes others think about their own vision.
I am like many here a crypto fan and therefore certainly not only here for the technology. But also to discuss and think about the future.
So if you have any comments or suggestions, please let us know. We can all benefit from this. And spread the word about the vision of Nakamoto!
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I'm not giving any financial advice, this is just a blog for more information.
A few easy steps to keep your crypto safe:
- Never give someone your 12 / 24 passphrase!
- Never give someone your private keys!
- Not your keys not your coins!
- Just don't send any coins to strangers that ask for coins to double your investment!
- Don't use a centralized exchange as a wallet!
- Don't use centralized exchanges if this is not required!
- If you send your coins or tokens think twice before doing so!