What is Bitcoin?
Oleg Andreev, software designer
and security developer, in an article published on his personal blog, compared
bitcoin with various economic, social, economic assets, technologies and
phenomena, and examined their differences and similarities. In his article,
Andrew first outlines the similarities and then the differences between Bitcoin
and each of these phenomena. To read this article, stay tuned to Digital
Currency. Bitcoin is like cash. Bitcoin transaction is non-refundable and you
are fully responsible for it. If you lose or forget your wallet private key,
you will lose your property. You can give bitcoin to someone to keep it for
you, but like a bank, you have to trust these people and make sure they do not
run away with your money. Bitcoin is not like cash. You can store as many
bitcoins as you want and they will not take up any space unlike physical cash.
You can send it to anyone via wired or radio communication. Bitcoin
counterfeiting is impossible. The transaction will not be completed in one
second, you will have to wait 10 to 15 minutes for the encryption to be
confirmed by the network and you can be absolutely sure that the transaction
has been completed. However, sometimes you can send transactions with a fee of
close to zero to the network. The risk of cancellation of these transactions is
relatively low. Bitcoin is like gold. Bitcoin is not produced by itself and
there is a limited amount of it. This value is scattered in four dimensions of
space-time (three dimensions related to space and one dimension related to
time) and, of course, more in time. To get bitcoins, someone has to give them
to you or extract them. Bitcoin is as brilliant as gold, not physically, but
technologically: eye-catching engineering, wise motivation, contract
programming language, freedom of choice, and freedom from coercion are the
features that make Bitcoin brilliant, and It attracts people. Bitcoin is not
like gold. The supply of new bitcoins through the extraction process is well
defined and planned (only a certain number of bitcoins are generated per hour).
So, you can be sure that no one will suddenly find a mountain of bitcoin or
extract it on other planets. For example, the asteroid "16 Psyche",
whose orbit is between Mars and Jupiter, has such a large amount of gold that
if we divide its gold at the current price per ounce among the people of the
world, about 100 billion dollars of gold per person will reach and This means
the overnight destruction of the world economy. But you can not find any planet
where a lot of bitcoins are stored! Unlike gold, bitcoin mining is clearly
programmed. If the miners' efforts to extract bitcoins increase, the difficulty
of the network will be readjusted and the extraction process will become more
difficult. On paper it is possible to extract all the gold available in one
day; But in the case of Bitcoin, even if you use the most powerful computers in
the world, you can not do it. Bitcoin is like a bank. In Bitcoin, like banks,
we deal with computers, databases, and transactions. The database stores the
history of all incoming and outgoing payments; That is, who sends how much
property to whom. Everything here is digital. There is no treasury room for
storing gold and safes, only some data is kept in a "general ledger".
This is the structural similarity of Bitcoin to the bank. Bitcoin is not like a
bank. In Bitcoin, everyone can verify the authenticity of the general ledger.
There is no responsible manager to update the head office and ensure that it
does not interfere. Each person can have multiple accounts and all of these
accounts are anonymous (unless someone wants to reveal their identity). Bitcoin
Distributed General ledger does not store emails, all that is stored in this
general ledger is the address and inventory of each address. The bank can lend
more than the amount of money it has, but there is no possibility of
"deficit reserve banking" in Bitcoin. Deficit reserve banking is a
type of banking in which bank reserve is the only fraction of all customer
balance. In fact, there is no debt in the Bitcoin general ledger. You either
have money in your address and it completely belongs to you or you do not have
money in that address and you can never use it! Bitcoin also allows you to lock
your money through contracts; Cryptographic puzzles are designed to share
decisions between several people or to generalize them over time. Bitcoin is
similar to the currency in the monopoly game. Like monopoly games, bitcoins are
intangible chips that have no value and people value them because they can be
used in the game. The same is true of gold and any other currency. Bitcoin is
not like monopoly money. The difference between bitcoins and monopoly tokens is
that the number of bitcoins is limited and no one can counterfeit them. For
this reason, it is a good candidate to replace world-famous collectibles such
as silver and gold coins and has the ability to store value. Bitcoin is like a
gate. Git is software for controlling and protecting open source versions of
software and a tool for programmers and developers to store, manage, edit, or
share their work. At the gate, all developer changes are organized as a chain
and protected by hashing. If you are sure that the last hash is correct, you
can get and verify all previous information from any source to make sure this
is what you expected. Similarly, in Bitcoin, all transactions are organized in
a chain called blockchain. Once a block has been validated, by trusting its
hash, you can trust the hash of all previous blocks and the information
contained in them. In this case, distributed storage becomes possible and the
process of checking the accuracy of the subject becomes easier. Bitcoin is not
like a gate. Despite the very close function of Bitcoin and Gate in the
annotation of stored information, there are two differences. In the Bitcoin
system, everyone tries to work on a chain. But at the gate, everyone can have
multiple branches and separate and reassemble them throughout the day. You
cannot combine separate branches in Bitcoin. Blockchain is actually a
transaction record tree; But there is always a large branch that is valuable,
and small sub-branches (which never last more than one or two blocks) have no value
at all. At the gate, content matters, not categories; While in Bitcoin,
consensus on the core is more important than the content .Bitcoin is similar to
bitcoin. BitTorrent is a platform for file sharing and decentralization of
large volumes of information. Using BitTorrent, users can interact with each
other and send or receive the files they want. BitTorrent is a completely
decentralized network, there are no banks or servers to store information
centrally. Bitcoin blockchain is like a bitcoin torrent file; That is, it is
fully encrypted and shared on a large number of computers. All participants in
the network, including miners, act on an equal footing. If one part of the
network is disrupted, the flow of transactions can continue through other parts
of the network. Even if the entire network fails, transaction information is
stored on thousands of standalone computers and no one's money is lost. When
miners reconnect, transactions resume; As if nothing had happened. Both Bitcoin
and BitTorrent can survive a nuclear war; Because the information is not
damaged by radioactive radiation and can be easily reproduced. Bitcoin is not
like BitTorrent. They have two major differences. There are many different
files in BitTorrent; But in Bitcoin, instead of many files, there is a single
file that is always getting bigger; This file is called Blockchain. Also, the
most important participants in the Bitcoin network, the miners, receive rewards
and rewards for their participation in the network. But BitTorrent contributors
do not have such an advantage. Bitcoin is like freedom of expression. Each
transaction is a public text message that can be expressed regardless of where
or how it is. If some miners receive this message, they will add it to the
China block and this message will go down in history forever. Everyone will see
it and no one will be able to clear it. So bitcoin is very similar to the
phenomenon of freedom of expression. Bitcoin is not like freedom of expression.
It costs money to say anything. To transfer a coin in a transaction, you must
first have that coin. Therefore, anyone who does not have a coin is not allowed
to do the transaction, and only those who are qualified and can get some coins
first have the right. Miners may also reject unpaid or spam-containing
transactions. So no one works for anyone for free; But everyone tries to work
together voluntarily. From this point of view, bitcoin is contrary to freedom
of expression.
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