LuxAlex

You won't be able to regulate Bitcoin, that's what central banks and governments slowly are realising. Blockchain will be there and ready when fiat takes its last breath. I am very aware of the scalability issue, I actually wrote an article about it some time ago, here: https://medium.com/alvalor/blockchain-and-the-importance-of-scalability-30dcc0479762 This is a very healthy attitude, there is a lot of fraud going on right now. A lot of people jumping on the hype bandwagon. But you also have to keep in mind that when people pay 6$ for a transaction, they aren't just using Bitcoin for its efficiency, but because of it being an irreversible transaction immune to central manipulation and control.

I have been a long time lurker and listener here at freedomainradio and its time I contribute. I want to talk about the unseen impact and the power of asymmetric cryptography, for those who don't know, cryptography is what enables spies to communicate confidentially and what makes web-banking secure. It also happens to be the underlying math of Blockchain. Considering all the talk is about the amazing rise of blockchain technology and all the new features and use cases. There even is talk about the efficiencies it will provide to governments and banks. But there is something unfolding in front of our eyes that often is forgotten to be mentioned. Not many have identified what it is. However it is very profound, I’d argue that it’s even more profound than the inception of the Internet. Looking at how the Internet impacted our world, what industries it changed and how politics had to adapt to it, you can get an idea of what change blockchain will cause. The Internet is mainly used for direct information sharing and entertainment. A great encyclopaedia and a place for people to connect. New industries have been created and others have been crushed. For example publishing companies who didn’t adapt and stuck to print only, quickly saw themselves losing to the competition. The Internet disrupted by being a really efficient communication layer, the blockchain is really efficient at providing a layer of trust. A unifying settlement layer, where transactions, agreements and contracts are secured. The internet completely changed the landscape for companies who provided traditional ways of communication and information, and so will blockchain for companies who provide trust services. Such as Notary services, banks, exchanges, online payment providers, casinos and many more. Blockchain is decentralised, meaning there is no central point of control and no government can change the consensus rules of the network. Communications within a network can easily be encrypted and make it about as difficult for governments to prohibit its traffic on the Internet as the use of torrent file sharing applications. Once you build a currency on top of these properties, you get something truly unprecedented. It will be extremely difficult for Central banks to devalue and governments to interfere with your freedom to own, spend and use your blockchain token or currency. This means everyone suddenly has access to a Swiss bank account that can be accessed from around the world, on every phone and every computer. No one is able to look into your account, freeze your account or seize your funds. What is even more important is the efficiency at which blockchain delivers these services and tools. This efficiency is also the main reason for the current adoption momentum. Fundamental free market principles predict that the most efficient service, using the least amount of resources and providing the most value to the user will gain a major portion of a market. Blockchain is so incredible efficient due to the elimination of overhead infrastructure, such as the ones companies have offering the same service. You have no wages, rent or bills to pay. The social and political impact is going be huge once a critical mass is reached. Currencies backed by banks and governments won’t be able to compete with the efficiency and confidentiality of blockchain-based digital currencies and fiat currencies are ultimately going to fail. The consequences of a widespread adoption of such an alternative currency is politically detrimental to today’s society. A society which is only sustained by central banks artificially keeping interest rates low and with an increasingly indebted government. In the end the incredible efficiency that blockchain has to offer will make the government’s monopoly on force useless. In the old world, if you didn’t pay your taxes, the government could walk to your bank, freeze your account or forcefully remove your funds. In the new world that will be ushered by blockchain, governments will have a hard time even figuring out how much you own in the first place or what transactions you made, what you got payed for or what you bought. “Let me issue and control a nation’s money and I care not who writes the laws.”Mayer Amschel Rothschild (1744–1812), founder of the House of Rothschild. With blockchain, the people issue and control the nation’s money.

There are crypto currencies out there which consists of only 42 units of currency or even just 1. The numeric value doesn't really matter that much as long as it is dividable and you have to look at the absolute units of value (smallest divisible fraction). Imagine if you have 210 000 000 000 000 of the smallest dividable units, and you say well I want to call 100 of these a Cent and 1000 of them a Kilo and 1 000 000 of them a Bitcoin. Well there you go. You have a divisible unit of currency. Its all relative what you call a Unit of currency as long as you aren't talking about the smallest indivisible faction of unit. Regarding Mining, mining serves two main purposes, it as you pointed out correctly A. distributes the currency around the world, but also B. serves as a validation mechanism which is incentivised via the economic reward (mining reward of new bitcoin). This validation mechanism certifies the ledger which has the most mining power assigned to it as the valid one. Which means that if you wanted to attack the bitcoin network with malicious intents, you would have to gain control of at least 51% of the mining power. This would cost you millions of dollars in equipment and electricity cost. And as bitcoin grows bigger so does the computational power pointed towards mining making it increasingly more difficult to infiltrate and manipulate the bitcoin network. Mining is what essentially is what is valuable about Bitcoin, its what allows people to put trust in the validity of the payment protocol being immutable. I hope that isn't too much of a slap of information, happy to elaborate on details! Best, Alex.