The nightmare of governments and banks (1) ... What is Bitcoin? And how and why emerged from the foundation?
If you think that bitcoin is the beginning of the emergence of virtual currencies, you are actually wrong in two things, the first is: Composition is not just a "coin", the second: actually create a real and more sincere than your bank balance you see on the ATM!
Well ... Let's not jump to conclusions early, let's first know how, when and why it originated in composition, and why the term crypto-currency appeared from the ground up.
# Why should you know how Bitcoin appeared?
Many people ignore the reasons and circumstances that led to the emergence of Bitcoin, and this is a great mistake! Knowing the motives that led to the emergence and success of something will make you aware of the credibility of this success, and the eligibility of this system the value it gives to itself, and gives you also a near vision of the future feasibility of your investment in it.
Getting into the world of Bitcoin without knowing the motive behind it is like sailing a boat in a sea view you know nothing about except that others have told you it's full of fish that's easy to catch, leaving your usual style and risking losing your time and your boat.
Well ... we do not mean the literal meaning of your life here, but to convey that the purpose of the metaphor is the "financial part" of your life.
# How and why did Bitcoin appear?
It can be summarized that the appearance of the composition is mainly based on the negative side of the management of banks of our funds, in addition to the ability to take advantage of modern technology to achieve the least physical burden and possible time for those who use it.
To know how and why you came to form, you need to know two important things that I will explain in the simplest possible way:
- Little information about the mechanics of banks
- Brief history of money and gold coverage
If you think what I'm going to say is a boring story, get ready for more exciting events than any film I've ever seen; in fact, you're one of the heroes of this story!
# Look at banks and their "real" money !!
I hear someone say: This is another crazy! What will you say about the banks? No life or economy without banks Oh this, do you want us to store our money in our pockets?
of course not!
But what I will quote here is just facts that ultimately lead us to the basic point: how and why appeared in composition ... only!
Imagine a million dollars that you, like any natural person, put in the bank to keep, and then another person called "Ahmed", for example, asking for a loan from the bank for $ 250 thousand dollars to do his own project, what the bank will actually do is that he will lend " jhon "from your money you are $ 250 thousand dollars to become your remaining balance in the bank is only $ 750 thousand, while your balance on the ATM screen is a million dollars full! Provided that the Bank takes "jhon" sufficient guarantees that it can trust its ability to repay the $ 250,000 it has borrowed, in addition to a predefined benefit.
What happened here? What happened is that the bank "trusts" well that you will not come and withdraw all your money suddenly, and also "trust" the ability of "jhon" to repay the loan, and you "trust" well that the bank will not steal you, It is owned by the bank originally, but it claims that you still own it and that it is able to give it to you at any time, 250 thousand dollars imaginary only based on "trust"!
Look at the broader term Dear reader, Deposited in millions, Loans in billions, what do you expect? The billions of virtual money that banks claim to be yours at any moment, which they really do not own but rely on your "trust" in them, as well as their "trust" that the day will not come when all depositors demand their money at once!
Why do banks do this? For interest of course! A gain in billions is due to banks because of the interest paid on the loan that is repaid, in the end the bank is not a charity!
# Money and gold
Let's leave the present a little bit and go back in time, the emergence of money - as most of you know - first came in the form of an agreement among a group of people that a rare "trust" has a value because of its scarcity and therefore can be replaced by other products that correspond to this value The economy of the world in a period of time to be gold is this commodity, but of course the idea that everyone walks in the way carries a measure of gold was impractical, and the retention of rich gold in their homes carried with him a great danger to them from thieves and criminals! The transfer of gold from place to place carried a greater risk!
In short, the world has decided to change the way of dealing in buying and selling. Instead of dealing directly with gold, it is decided to use "agreed" papers. These securities are in fact safe receipts that can be exchanged at any time with a corresponding value of gold. In the "safe place" became with the time called "Bank"!
The term "coverage," which means that every coin has a gold equivalent, that you had a dollar before 1971 meant you had a piece of gold in the US Treasury! This is your "right" but you just leave it in a "safe place"?
It is decided that the Central Bank will determine the value of the dollar in accordance with what it deems to be in the interest of the general economy and be responsible for printing the dollar papers in the quantities it deems appropriate.
With the end of the Second World War and the destruction of most of the world's first economic countries, America alone owned more than half of the world's official gold reserves, thus becoming the richest and largest country in the world economy. But as Japan and Germany recovered from the effects of World War II and achieved economic growth, Of them in the global economy is significant and influential. This increase was offset by a clear decrease in America's contribution to only 27% after it was 35%! This coincided with the fall of America in the solution of the Vietnam War, which came out with US President "Nixon" to change the world several resolutions called "Nixon shock," one of these decisions was: the abolition of the possibility of converting the dollar to gold even to foreign governments!
See the announcement or "shock" late President Nixon:
Nixon shock? What's the problem, we trust America and trust the dollar! In the end you can buy anything, who will turn it into gold anyway?
The problem dear reader is that the value of the dollar purchasing decreased by tens of times than it was before, what you could buy an old five hundred dollars will buy it now at least $ 20 thousand dollars! While you could buy the same old and new gold with almost the same amount, or slightly different!
It's like giving you money for someone to give you a receipt, and then coming back years to recover your money to tell you that you will only recover 10% of them! Because this is the value of the receipt you own now !!
# Banks control!
From the previous points, you can know how banks have become control of money, including the central bank that controls the value of the currency itself, determines the amount to be printed, and how the global economy is now based only on trust, which collapses with banks, states and future individuals ! But does not require the collapse of confidence, enough only the inability of the bank to pay its debts on time to get the same results!
Let's not forget, of course, the high fees charged by banks and money transfer companies such as: Western Union if you want to send some money to someone else! As well as routines and disruptions that occur from time to time, which may take long days to complete the conversion!
# The idea of the encrypted currency system appears
In 1998, Wei Dai talked about the idea of a system of encrypted currency that does not have a physical presence, but it exists entirely on the Internet, where the government controlling the currency is itself the individuals they own, and where there is no central authority.
This post was the nucleus from which a full economic system was launched in 2009, a system that started small and now runs into a terrible weight.
- A system in which you can convert the currency to another person without having an intermediary like the bank!
- A system where a person or government can not stop or disable the conversion for any reason!
- A system in which money is sent instantaneously in a fraction of a second without delay up to days!
- A system not controlled by the central bank, nor any other central or governmental authority in the currency!
- A system in which the value of money transfer remains small or non-existent in return for figures that may sometimes be astronomical when converted through official systems!
- The system of most people - including some of its users - thought it was only an imaginary system, but made those who believed in it "real rich."
Talking about the Bitcoin system! ---"blockchain"---
This system was released in 2009 by "Satoshi Nakamoto Satoshi", who is it? Is he a person? Collection? alien? No one knows and no one cares. In the end, he is not a center of the system and he does not control it. As long as you know quantum laws, for example, you will not care much about who discovered them. Laws work with or without him!
In 2009, this preamble was sent to a number of technicians, who were talking about a new electronic currency system called Tektin, called Satoshi Nakamoto!
The preamble speaks of a new electronic currency system called formation
You can see the full preamble here.
# What is Bitcoin?
Configuration can be defined as the first fully integrated Crypto-currency system that exists entirely on the Internet and has no central control as it does with conventional money.
While governments allow more money to be printed, a system allows the formation of new currencies in a different way: "mining." As gold emerges from the ground, it emerges from the soles of the Internet by solving mathematical problems that require a lot of computing power and energy. And become increasingly complex over time.
When the mathematical issue is resolved, the computer or device that has been dissolved is rewarded with a corresponding value of configuration. This value can be used later in various purchases and sales, or even converted into ordinary money which is not available in some countries.
Not only is it formed with gold, but it is also limited in quantity, with a maximum capacity of only 21 million, which is expected to be reached by about 2040.
Although small in its infancy - to the extent that a person was forced to lose 10,000 composition in exchange for two units of pizza - the small idea quickly found its way to spread and ratification in a way that no one expected, it was a slap in the face of some countries and governments, Some of them were originally formed, while others sought to legalize it as much as possible!
# But!
What makes Bitcoin secure?
Who determines the Bitcoin value?
We hear about credit card theft and hacking. Is this possible with Bitcoin?
Why can not I make copies of Bitcoin as with digital songs and movies?
Why does Bitcoin need all this computing power?
Are there alternatives to Bitcoin? What are other encrypted currencies and what are their advantages?
Why is Bitcoin so crazy?
What are the optimal mining methods?
What is the relationship between graphics cards and mining?
Are there other ways to obtain formation other than mining?
The previous questions and many other questions will be answered in the coming articles, which will see a great practical aspect, in addition to the very important theoretical aspect in this regard.
In the end we hope that this article has brought you some fun and benefit, if you have any experience or information is important in this matter, we are very excited to share with us in the comments.
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I spent a fow hours writing in this, I hope that this post you like it, I'm sorry about the grammatical errors
