Bitcoin’s basics & Benefits
Topic: 2/11/22
Source: Robotics & Automation and Mint Life…etc.
Over the past few weeks, I have been reserving into the various types of cryptocurrencies such as Alavanch and Etherium. Therefore, this week I decided to focus on one of the most popular cryptocurrencies - Blockchain. This is important to me because it will help me decide what currency I would like to base my business on ( for original work). Thus in this Evidence of Learning, I will go into detail on what Bitcoin is, How it works, and what its benefits are.
In order to properly understand what a bitcoin is and how it works you need to understand how it compares to a computer. The computer has something called a hard disk, in this hard disk are small boxes, the boxes are slowly filled one after another by the file and downloads you download. In this hard disk, there is an index that tells the computer exactly where in which box is the information you're looking for is located. For example, like a book’s table of contents, it tells you exactly where the information you are asking for is located. Similarly, the index of the hard disk knows where each software and download is located in the boxes, so it can easily bring it to the screen. But the material does not go straight from the hard disk to the screen, In between the information will go to the memory. So the process is Hard Disk → Memory → Screen. The memory acts like a catalyst and speeds up the time it takes to bring up the file. So basically a file that goes to the memory than the screen will have a shorter runTime speed than the file going straight from the HardDisk to the screen. So going through the memory makes the file/download/anything load faster and show up faster.
Thus From this, you need to understand how the computer’s hard disk is built up of small bits/boxes that are slowly filled one by one, and that there is an index that remembers where everything is located.
Why do we need Bitcoin?
Bitcoin is the solution we have been waiting for, this software can prevent inflation and corruption in a clever way. An example of when inflation happened was in 2008, what had happened is that Bill Clinton the president decided to print around 3 trillion extra dollars. They wanted to give people more money to buy a home to live in and create jobs. But they missed to predict one major downfall this could cause. Thus What ends -up happening is that the government gives all this money to the banks and asks them to give it to people who need the money. The banks took the money and did just that, they gave it to people who needed it without checking if they are even able to pay the money back. For example, Bank of America gives Bob $50,000 for a car, home, and to buy land. But they never checked the fact that Bob doesn't have a job, isn't specialized in anything, and the fact that he probably can't pay back this money. Similarly millions of people took loans they could not pay back. So the bank did what they normally do, which was take all their assets. But while this was happening because the amount of money in circulation increased the value of the money decreased to all land value and such decreased. So when the bank took back all the people’s assets, they were at a loss because they got back less than what they loaned because of the drop in money value. And this ended up causing a whole disaster, but as you can see inflation can be a very dangerous thing. The second problem it solves is corruption, The whole government has control of how much money to print, who to give, and more. When more power is available it is human instinct to take it and benefit from it. Thus lots of politics and governments we see are highly influenced by a few major people, bringing way to corruption. But not only in the government but in places such as banks. for example, if I wanted to transfer $200 to India, it can take 3 days or even 2 months and if the banker doesn't want to send it or tells you to wait, you have no choice but to do so. It’s all based on what the banker wants to do. This is where Bitcoin comes in, since bitcoin is a computer software it prevents things such as favoritism, which is where the bulk of corruption comes from. Everyone is equal, for example, even if you are the president or prime minister you still have to follow basic traffic rules. And that's what bitcoin does, regardless of who you are, you don’t get any privileges. Because Bitcoin is ruled strictly by people only. And it stops inflation issues because there are only 14,000,000 bitcoins currently and this amount is never going to increase or decrease. But the bitcoins can be split into SAT’s which is the 100th millionth of a bitcoin. So there will never be too little bitcoin. In this way it prevents inflation.
Thus BitCoin is a revolutionizing technology that prevents inflation and corruption on a global scale. And is something that will change the world forever.
Bitcoin Benefits
Bitcoin is a revolutionary technology created (white paper) by Satoshi Nakamoto in 2009. This Bitcoin is something that will stop corruption, easy transportation of money internationally, and in general, lower transaction fees, and convenience.
Decrease corruption in government
Bitcoin will help decrease corruption in the government because financially it will prevent the government from choosing when and how much they want to print. For example, if our president feels he wants to print more money tomorrow, no one can stop him. Bitcoin will not only prevent inflation in the economy but actually bribery in the government. Government officials throughout time have shown bribery, either for elections or for supporters in the government system. This bribery is either done by money or assets in secrete, but through bitcoin, nothing is a secrete. Because bitcoin is based on a block that is all interconnected by chains, no amount of information is ever lost. So if money was secretly given to officials as bribes, it would be recorded and could be used as evidence against the offender. Thus preventing any such illegal bribery in the government.
Convenience
International transactions and transportation of money:
International transactions and transportation of money are made simple and easier by bitcoin. Because it not only decreases transaction fees but also decreases the time it takes to transfer the money. For example, if I wanted to transfer 50$ to ICIC bank in India it can take anywhere from 3 weeks - to multiple months, because of the extensive amount of variables. In order to transfer the money, there are so many people involved and if one wishes to not work properly it can extend the time. Thus it decreases time and transaction fees.
Efficiency in a transaction:
With bitcoin one is able to easily send and exchange money in a secure and fast way. With no third-party entering in between it properly and efficiently does the transaction. This is beneficial in so many cases for example in estate selling. For selling estate such as a house one needs an owner, a real estate agent, and many more to get the transaction done properly. With so many people it not only takes extensive time but also costs a lot. They not only have to pay for the house/sell but have to also pay for the people to help with the process. Proving the current method is not only time-consuming but very expensive. Thus Bitcoin solves this problem because it is very secure and a quick process, one is able to sell a house in a matter of hours of security.
In conclusion, these are only some reasons Bitcoin is so important, but it shows how much capacity this technology has. And how it will guide us to a safe, smarter future. However, similar to etherium due to its security issue I am not fully convinced that this will be the best currency for my business. Next week I hope to look into Solona and/or Binance - both cryptocurrencies companies.
MLA Citation:
Mint. “8 Pros and Cons of Bitcoin.” MintLife Blog, 13 Oct. 2021, mint.intuit.com/blog/investments/pros-and-cons-of-bitcoin/.
Edwards, David. “What Are the Main Benefits of Bitcoin? Get All the Essentials.” Robotics & Automation News, 14 Dec. 2021, roboticsandautomationnews.com/2021/12/14/what-are-the-main-benefits-of-bitcoin-get-all-the-essentials/47642/