In a world constantly being changed by technology, more and more things are being replaced by digital versions. Technology has even reached the level of producing writing convincing enough to replicate human writing.
But another, and arguably more revolutionary piece of technology has existed for over a decade – hidden in plain sight, and it has revolutionized the world’s money.
In 2008, when Satoshi Nakamoto wrote his foundational information document on Bitcoin called a whitepaper, it went relatively unnoticed. Especially in the tumultuous economic conditions it appeared in, most people focused on money were more worried about the United States economy.
But as time went on, small groups of people started to use Bitcoin. First, it was only used by people who just thought it was cool or people who wanted to make payments without being tracked by the police. For example, the earliest example of trading Bitcoin for something tangible was when a Florida man paid 10,000 Bitcoin for two Papa John’s pizzas, which were worth about $25. That story has since become a legend, as the price of Bitcoin is now hovering around $17,000.
Now, at this point in the story, Bitcoin is no different than any other cryptocurrency or “meme coin” as some have been coined. One such example is Dogecoin, a cryptocurrency among many that exist more for fun instead of a legitimate use case.
But Bitcoin has several qualities that either few or no other cryptocurrencies have: it is finite. There will only ever be 21 million Bitcoin. Because of that, and because Bitcoin has to be mined in order to obtain it, there is real value tied to the ownership of Bitcoin.
Cryptocurrency mining, in the case of Bitcoin, is the process of using computers to verify transactions from one user of Bitcoin to another, which leads to another important part of Bitcoin: its ability to be traded between two parties who do not know each other, but at the same time, guarantee that neither party is lying to the other.
All around the world, if two parties want to do business with each other, they generally require a third party to ensure that neither group is trying to deceive the other. For example, if someone buys something from Walmart, there is a third party, the credit card company, that ensures Walmart gets its money.
However, with Bitcoin, trust is guaranteed despite the fact that no middle man exists. It is a complex system, but using cryptography, miners are able to do the math necessary to promise two parties engaged in business are telling the truth. This may seem simple, but it has major applications.
In the United States, few people have a problem with the government interfering with their payments. However, in countries where governments are oppressive and actively limit what their people can and can’t do, Bitcoin is a valuable tool.
Although governments may be able to force credit card companies to halt payments for freedom-loving people, Bitcoin is a network, and the entire network would have to be taken over to halt even a single person’s ability to trade Bitcoin. Bitcoin not only allows payment to be made across the world, it allows payments to be made into countries with oppressive governments, something that no fiat, or government currency, can do.
Anthony Pompliano, a well known Bitcoin pundit and owner of venture capital firm Full Tilt Capital, said, ““Bitcoin is digital gold. It’s the first global currency that allows us to send value anywhere in the world without any intermediaries.” Junior Troy Tomson, a cryptocurrency enthusiast, has a more moderate view than Pompliano, saying “the only thing that will change [if Bitcoin takes over] is the privacy level and speed of transaction” of money throughout the world.
He argues that there are some activists who do not currently favor Bitcoin because they believe that its environmental costs are too high who will realize how effective it can be at freeing the world from tyranny. If the government can’t control the money, it can’t control much of anything.
Lastly, even if there is another cryptocurrency that has all of the previously mentioned attributes, no other cryptocurrency other than Bitcoin has what is called the “network effect.” Just like how another social media platform will not overtake Facebook even if it is better than Facebook because of the platform’s immense popularity, the same applies to Bitcoin. Even if another cryptocurrency comes along that can improve on Bitcoin, because Bitcoin is so widely used and built upon for other technologies like the “Lightning Network,” it is unlikely that Bitcoin will be overtaken.
Regardless of the future impacts of cryptocurrency on the world, one thing is for certain: Bitcoin has reached the critical mass required to be here for good.
