Have you realized that bitcoin is a trending topic? Surpasses by far political events, catastrophes, and even the Great Pandemic itself in mentions and headlines. The world as always showing off its divisions has divided again during a pandemic; we have the pro-vaccines and the anti-vaccines. Now, with digital currency, we have pro-crypto currencies and anti-cryptocurrencies. Both are booming, so that the first ones preach the financial paradise thank to the digital currency, and they do it with faith and enthusiasm. Like the faith and enthusiasm of the one that proclaims that a couple of shakes will make me lose twenty pounds of my weight. The other ones do it too preaching with enthusiasm, but the opposite, the collapse, the financial Armageddon thank to that currency that who knows where it came from and looks like the seal of the beast.
In yatedistecuenta.com we will not generate a stance, but we will do our best to explain this new reality with a millennial approach answering 5 basic questions about bitcoin.
1- What is a bitcoin?
Is a currency that only exists in the digital universe. We will use as an example a digital currency that you already use (without realizing) and that only exists in a digital way, and maybe were the pioneers of a decentralized currency like the bitcoin. Such examples are the points on your credit or debit card, with your points you don’t have cash, what experts call fiat money, are just digital accumulated points in your credit or debit card to be able to make transactions of purchasing of products and services in affiliated businesses. Or we have the flight miles, they don’t exist physically only digitally likewise accumulated in a credit or debit card, but in the same way, you can purchase airline tickets, it means there is an agreement between two parts to accept securities points or miles as a substitute of cash. The same is with bitcoin, money that exists digitally but you can use for any kind of commercial transactions as long as both parts agree in paying and receiving bitcoin.
2-How was bitcoin born?
If the pioneer of digital currencies were the points in the credit and debit cards. The financial institutions had the idea in their hands but didn’t develop it. The born of a bitcoin has also its pioneer in the videogames from the ’80s and ’90s. Let us think, for example in a specific case let us take the case of the game Super Mario Bros, and let’s think that every coin that Mario earns in the game is a bitcoin. Ok very easy, right? But here it is where Satoshi Nakamoto, the anonymous inventor or anonymous inventors, shakes the idea and gives it a turn of complexity. It is not enough that Mario stretches and reaches every coin to earn it before he must solve a mathematical problem. Simple right? but in this case, Mario has to earn 21 million coins. That is the maximum. There is no more. But the challenge is after extracting a coin, the mathematical problem becomes more difficult, more complex.
It is like in Mario Bros’ terms every world that Mario passes the level of difficulty becomes greater and he has to pass as many worlds as necessary until he gathers the 21 million little bitcoin coins so, Mario instead of keeping all the coins for himself, calls all the gamers in the world that want to join him to bring power from their machines to solve the complex problems that generate after extracting each little coin. So the game rewards the players that put power from their personal machines to serve Mario to solve the mathematical problems and rewards them with a bitcoin. Simply a solved mathematical problem, a bitcoin is born. This bitcoin belongs to whoever solved the problem since it is “brought to life” in the digital world, it is used for commercial transactions like any other coin.
3.Why is the process of generating a new bitcoin called “mining”?
The expression “mining” is for illustrative purposes, you don’t have to wear your mining suit, but as difficult as is extracting gold from the depths of the mountains or in the riverbed is solving the mathematical problem that gives life to only one bitcoin and for the big amount of digital workers needed. That is computers with a great processing capacity. For that reason, it is popularly called “mining”.
4. But why a simple prize becomes a circulating currency that can buy any kind of goods and services with no frontiers?
Because that is the precise objective pursued. A currency with universal acceptation whose value would be the same everywhere around the planet without depending on the financial entities for its transactions. But that sounds like utopia… The only way that it could be viable was that people trust it. And the trust consists in the real value of the currencies either made of gold, silver, or paper is the trust of the user the one that gives it value. The result of the experiment at the moment of writing this article is that thousands of people have trusted in this prize. The bitcoin results of the solution of a mathematical problem as a trade currency.
5. Who founded bitcoin?
We don’t know who started the experiment. In an Internet forum, a user called with the pseudonym Satoshi Nakamoto published the draft of the project. It was his first public appearance. Then this user disappeared leaving no track. Some people believe that is all about a movement of computer specialists and economists willing to achieve their utopia. No intrepid journalist has found who is Satoshi Nakamoto, so it looks like is a group of digital innovators with a financial experiment, innovative and disruptive thrown to the networks to study its behavior.
These are not all the questions to answer. There are more. But in yatedistecuenta.com we expect that these answers lead the way for a simpler comprehension of the novel topic of the cryptocurrency that sooner or later will reach us all. What do you think? Do you believe that cryptocurrencies will involve a radical change in the economy of society? Do you think that this decentralized system without governments and banks in between could originate a new economical order fairer and more equitable? Or do you think that the cryptocurrencies will just make richer the rich and like every previous fever like the gold one or the petroleum one? Which other doubts do you have about bitcoin and cryptocurrencies that you would like us to explain in a simple way here in ya te distecuenta.com?
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