What do computer geeks, ancient Byzantine generals, and half of the world’s population have in common?
- They all have problems being solved by Bitcoin. (BTC)
Today we are going to explore three ways Bitcoin and blockchain, the technology BTC is built on, is solving ancient, current and future problems.
- It solves “The Byzantine Generals” problem.
The “B.G.P.” is a parable borrowed from computer science that poses the question of how to guarantee security between independent parties over an untrusted network, like the Internet.
- The intrinsic value of Bitcoin > gold.
Gold has retained its view as valuable in our eyes over so many centuries because it’s great at being valuable, something which, it turns out, is remarkably difficult to do. Later in the article, we explore why Bitcoin does it better.
- For many, it offers freedom from their governments.
Bitcoin is not controlled by any government or entity. For the 4 billion people who don’t have trust in their governments or who can’t access the banking system, Bitcoin may be a way out.
1. Byzantine Generals Problem
“The Byzantine Generals Problem”, a term borrowed from the world of computer science. Imagine an ancient army surrounding a Byzantine City, where the only form of communication between generals is a messenger. To avoid complete failure, all generals must agree on a single strategy. Imagine now, that some of the messengers are spies with the intention of playing a little broken-telephone, disseminating false information to confuse the battle plans.
Herein lies the problem. How do the generals employ an algorithm that ensures the messages are received the way that they were sent?
The “B.G.P.” poses the extremely relevant question of how to guarantee security between independent parties over an untrusted network, like the Internet.
- Bitcoin is the first practical solution to the longstanding problem in computer science and ancient siege tactics.
The practical consequence of solving this problem is that Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, guaranteeing that the transaction is legitimate, safe, and secure.
The consequences of this breakthrough are hard to overstate, with one of the most exciting benefits being that it has opened the door to trading platforms, like ChainBit around the world, where users can piggyback off of the extraordinary safety of blockchain technology to trade on margin, potentially exposing themselves to immense wealth creation.
2. The Intrinsic Value of Bitcoin > Gold
Humans are physically and emotionally drawn to gold. Societies and economies have placed value on gold, thus perpetuating its worth. - Investopedia.
However, it has some key drawbacks, including:
- Being difficult to transport and expensive to store;
- It is difficult to verify its quality; It is not easily divisible and currently is in the form of bars, coins, or jewelry, which makes transferring exact amounts difficult.
So, why is gold valuable?
Its value really comes down to the fact that it doesn't corrode and it is utterly scarce if we consider that we could fit all of the gold that has ever been dug up into 3.27 Olympic-sized swimming pools.
Those who speak of “the gold standard” as if its worth were obvious, rather than a collective hallucination, forget that the value of an ounce of gold is vastly more imagined than inherent. If gold was valued simply on shine, weight and density, it would be worth much less.
Bitcoin has most of the valuable properties of gold, including scarcity, limited supply increases each year, but on top of that, it also solves some of gold's drawbacks:
- Bitcoins are very easy to transport and store;
- Today you can transfer $100 million of Bitcoin for only a couple dollars over any internet connection.
- Storing Bitcoins is virtually costless;
- Bitcoins are easily verifiable;
- Information about every Bitcoin can be seen on the public Bitcoin blockchain, viewable by anyone connected to the network;
- Bitcoin is easily divisible;
- The smallest unit of a Bitcoin, a Satoshi, is one hundred millionth of a single bitcoin (0.00000001 BTC = $0,00063 - As of 13 April 21).
Bitcoin offers an efficient means of transferring money over the internet and is controlled by a decentralized network with a transparent set of rules, thus presenting an alternative to central bank-controlled fiat money.
Human Rights Foundation states that more than 50% of the world’s population lives under an authoritarian regime that don’t have trust in their governments or who can’t access a banking system. For them, Bitcoin can be a way out. According to Time.com, less than 1% of the world’s population has ever used Bitcoin, a technology that has the potential to change the lives of half the world.
Developing user-friendly wallets, more exchanges like ChainBit, and better educational materials for Bitcoin may be the most humanitarian application for Bitcoin and the most promising humanitarian program in the world, at that.
- It solves the “Byzantine Generals” problem.
Bitcoin is the first practical solution to the longstanding problem in computer science, and the more relevant issue of verifying and securing online payments with a shockingly low cost to transact.
- The Intrinsic value of Bitcoin > Gold
Bitcoin has most of the valuable properties of gold, including scarcity, limited supply increases each year, but on top of that, it also solves some of gold's drawbacks: Being difficult to transport and expensive to store, It is difficult to verify its quality and It is not easily divisible and currently is in the form of bars, coins, or jewelry, which makes transferring exact amounts difficult.
Bitcoin is not controlled by any government or entity. For the 4 billion people who don’t have trust in their governments or who can’t access the banking system - User-friendly wallets and more trading platforms like ChainBit, Bitcoin can be a way out.
Cryptocurrencies have been making waves ever since they were introduced to our society. Its applications are proving to be innumerous, ranging from financial security to humanitarian. If there were any doubts on the legitimacy and practicality of Bitcoin and its cryptocurrency-comrades, I hope that they have been cured. The future is here. Embrace it.