It has been a long time since the reign of spare societies (species instead of species) and today's few - where they have sprung up all over the planet - are nothing but monuments of pure, natural life, untouched by economic and other powers, so out of the spirit of evil or well-meaning advanced age. From the point of view of organized societies, wealth, in any form, is not just a buying tool. It is a means of power and the exercise of power, with money, with land, with animals… With the number of oxen or sheep, with which the power of its holder in the time of Homer was valued, Unbeknownst to them, they bequeathed to us the core of the current economic system, capital.
The need that the currency has created over the centuries - why, of course, how could small transactions with animals or precious metals be possible - has led to today, that the "currency", paper or not, is a non-negotiable presumption of power, a completely intangible concept, trust, and is typically captured in digital form. When we order the bank to transfer money to a recipient, the bank does not organize remittances with our own amount. It removes it from our account and transfers it digitally to that of our order.
According to a study on the global economy, published last year on the popular American shopping site How Stuff Works, of the total world wealth, in physical form there is only 8%! The remaining 92% are simple numbers in the banking software! That is, in the hypothetical scenario, where the money stored in world wealth would have to be taken over by the banks as a whole, the planet's economy would "hit" an irreparable crash! Capital controls in the period of the economic crisis had exactly this goal. To protect the banks' reserves from a mass withdrawal order, which could not be served in physical form of money.
A DIGITAL WEALTH THAT UNCLE SCRUTZ AND THE MYSTERIOUS LORD NAKAMOTO WOULD NOT LIKE…
There is, therefore, a global capital, stored in money, which is nothing more than black spots on the white background of each bank's database. Like the phone numbers on the agenda of each of us. Amounts large, or less large, listed next to names. This portfolio is the heavy artillery of any financial institution. Stored in a strict, desirably inviolable software, protected as a pupil of malicious attacks. These are the fortunes of this and that, measured on paper, since when we talk about the millions of euros or dollars of those at the top of the Forbes list, we do not mean bathtubs or pools full of banknotes, where the rich of the planet swim, as others Scrooge of our childhood ...
So the money, the currency, the purchasing power of each country, the means of transaction of its citizens is already in digital form, registered in the closed source software of the banks, which are also responsible for the storage and management of this software. This system, the financial one, was conceived in its form of operation centuries ago by the crusaders and the societies of the planet have been following it ever since.
In late 2005, Nick Szabo, a computer scientist, lawyer and cryptographer, posted a joint statement and a proposal on his personal website. He said that the money we already use and based on our trust in a third party - a government or a bank - is a condition that in practice has created problems, such as inflation, with the example of the turbulent fall of currencies in 1944, in wartime, which led to the production of inflation money with minimal value. He went on to say that, unlike currency, precious metals, due to their rarity and extremely high production difficulty, have non-negotiable value, independent of trust in government or a bank, and are certainly not at risk of inflationary attacks. But how can you use them in small daily transactions? How can you use a gold bar instead of natural or plastic money in one of your transactions? So he suggested bit gold, a digital cryptocurrency (so named because cryptography is used to create and use it), which could easily be generated by each of us, but should be available in relatively limited chunks so that lose its value.
Szabo's proposal remained in theory until the centralized management model of the state economy came in 2008 to challenge a mysterious signature, under a few pages (just 8 pages), entitled Bitcoin: A Peer-to-Peer Electronic Cash System "published in a scientific journal.
In the first days of 2009 a strange buying tool "sees the light of the digital world". It is round, shiny, well-designed, it looks like the euro, but in the center there is the letter "B". The most important of all? It is a simple image on computer screens. Absolutely intangible. And it aspires to replace tangible money.
Mr. Satoshi Nakamoto, who signs the investigation, presents a network of transactions, without the mediation of a bank database. Transactions are made directly between interested parties using a digital currency, a cryptocurrency, bitcoin. In other words, Nakamoto introduces an open source payment and digital currency system, which is managed by decryption methods. Bitcoin is a transparent, open to all digital register, in which any of its customers can see balances and transactions, which are made at any time. In fact, just as the internet decentralizes information, so bitcoin decentralizes money, rejecting any form of intermediary. It is considered, however, inviolable,
It is noted that as it turned out afterwards, the famous creator of bitcoin, Satoshi Nakamoto is a person - a ghost, whose details were never revealed. It remains unknown what gender, what age, what nationality ????? It is ignored even if it is a person or a group. From time to time, rumors "saw" the unknown creator in the faces of famous developers, information that, however, was never confirmed.
So what did the mysterious signatory achieve? With the help of blocks and the application of "blockchain" technology (chain, consisting of bricks) created a system of transactions, directly from user to user (without intermediaries, eg bank), which could easily and safely to be verified. The database of the bitcoin system does not exist in a banking central node, which is guarded in every way by prying eyes, but it is open and available to anyone interested. In fact, every user of the network of this chain has on his computer a copy of all transactions, which excludes the risk of interception or alteration of data, since a would-be hacker would have to "break" the database on all computers, where it is "hosted ».
How does blockchain work?
Each digital block is used as a "notebook" to record our transactions.
The three basic elements that characterize each "notebook" are a) the information we want to record (transaction), b) a distinctive unique number (multiple digits), which we have given to the specific "notebook" to distinguish it and c) a distinctive unique number (multiple digits) of the immediately preceding "notebook", which we had filled with our previous transactions (it means that in the first, the virgin block - "notebook" of the chain, this last number does not exist).
Thus, a neat chain with interdependent blocks is created, as the next one indicates exactly what its previous one was. Each block - "notebook" has a capacity of one megabyte (holds about 2,000 transactions). Once this is filled, someone from the user chain opens a new one.
For each new block, which is attempted to be added to the chain, ie for each new "notebook" that opens, not only are all the users - participants in the chain network informed, but they are also invited to confirm the information - transactions that are registered and to approve them. , in order for the "notebook" to be considered valid and to be introduced in the chain. How is this done? Suppose Konstantinos Ch. - a member of the blockchain bitcoin network - wants to make a transaction and records it in a new block - "notebook" that opens, which includes first and foremost the number of the last in the series "notebook" (we said that each of us has at our disposal all the elements of the chain). What he has to do now is to find and "name" the new "notebook" with the distinctive number that corresponds to it,
Then, the majority of users (51%) will have to cross the validity of the transaction of Konstantinos X., to agree that the "notebook" he suggests to open is correct - having all crossed them with a mathematical sequence their computer program) the number with which Konstantinos Ch. has "christened" it - and to accept it as part of the rest of the chain. In this case, then, the first one who correctly calculates the number of the new block, receives as a reward for his help in the transaction a number of bitcoins. This is the so-called "mining" (mining) and to achieve its goal (locating the number) it takes about 10 minutes.
If you are wondering how it is possible for 10 minutes to remain stable with a global community of user researchers gradually increasing - as more and more people around the world enter the "game" of cryptocurrency collection - the Nakamoto system has predicted this as well. In the chain of blocks there is a degree of difficulty, which increases with the entry of new users, so it adjusts the detection time and shields the chain even more! However, in any case this time does not exceed ten minutes.
Through such a participatory process, it is rather difficult to impossible for the majority of users of a blockchain network to "pass" a fake transaction, with which a potential intruder would attempt to alter the bitcoin chain.
FROM TWO PIZZAS IN AMERICA TO THE BEASTING FACILITIES IN CHINA
About a decade ago, a young American user appeared on an online forum discussing the new "fruit", the bitcoin cryptocurrency, who in a post then offered tens of thousands of bitcoins to anyone who supplied him with two pizzas. A farmer on the other side of the American continent responded to his request, who actually ordered two pizzas in the young man's name, costing about $ 30, and collected the cryptocurrencies. In the following years, the farmer realized that this offer had paved the way for paradise… The value of the digital currency that at the time of this particular pizza order reached $ 0.003 (that is, with one dollar you bought 333.33 bitcoins) had begun to climb uncontrollably, with the result that
But, the greater the degree of difficulty in "mining", the greater the requirements for the pc of each user. What once, in the "birth" of bitcoin, one could achieve with a laptop or even a mobile phone with internet access, is now a fairy tale of the past…
The financial demands on processor and graphics card power supply are skyrocketing… and the privilege of "mining" now belongs to "warehouses" or otherwise "farms" of computers of extremely high cost and capabilities, which "run" night "divination" programs of numbers, consuming huge amounts of energy. The "game" has gotten out of the hands of individual users and has gone to colossal bitcoin companies, but also to the "mining pools", in large user communities, where everyone participates in the common goal with their own processor (which has been upgraded as long as he pockets) and claims a share of the cryptocurrencies generated depending on his contribution to the common cause. As for the "farms" of production, most of them are located in China.
It is estimated that more than 70% of bitcoins are produced at the headquarters of the yellow race, where electricity is significantly cheaper and the processors, which are very expensive for the rest of the world, are in their place of production. In fact, many of these companies have been set up next to hydroelectric plants, as the surplus electricity that such factory owners find is not worth transporting away, instead of being lost on the… route, is available at these nearby miners' "farms". instead of a low price. So, the benefit is mutual.
AN UNCONTROLLED CURVE LINE ON THE STOCK EXCHANGE - INVESTMENT OR Gambling?
The "mining" in the first appearances of the cryptocurrency was paid with 50 bitcoins. Products of the time and as the supply of "hunters" of the hidden number increased at an uncontrollable rate, the reward of the winner in cryptocurrency was cut. The 50 bitcoins of 2009 became 25 in 2013 and 12.5 in 2017. In the current 2021 the reward will be reduced to 6.25 bitcoins and based on this model, in the period 2029-2032 the number of reward cryptocurrencies will be 1.56 , in 2033 it will fall to 0.78 and in 2081 each block is estimated to give 0.00019. The point is that in a year when our three grandchildren will probably take the reins, in 2140, a block will give the last infinitesimal fraction of bitcoin and there the production of the cryptocurrency will end, completing the cycle of 21,000.
The truth is, of course, that the leaping increase in the value of this digital currency is particularly impressive, and in fact in a short period of time. How come an intangible, digital cryptocurrency on a day in July 2010 equals $ 0.008 and just 9 months later (April 2011) a bitcoin equals one dollar?
(As for the current exchange rate… the difference is now dizzying. At 17:01 on Monday, January 4, 2021, a bitcoin cost $ 31,935,805!)
The rise in the value of bitcoin is interpreted. As the currency was (and remains) generally anonymous and the user and trafficker invisible to banks and governments, suitable for suspicious transactions. Bitcoin became the favorite currency of drug dealers, while through large tributes of reputable financial magazines, the public became acquainted with the new trend. Bitcoin soon took over… And where in April 2011 a cryptocurrency was worth one dollar, in July of the same year, a piece was worth $ 31!
However, as frantic in its rise was and is the stock market course of cryptocurrency, it was just as unpredictable and uncontrollable in its fall. Where its price goes uphill, there it crumbles. The reason is understandable. A stock market product, which operates independently of banking trust or loyalty to a government, but is not governed by laws and regulations, is easily influenced by socio-political developments and scenarios. In 2017, with the rumor that the Chinese government is focusing on banning the buying and selling of bitcoin, the fall in value reached ?? tartars and cryptocurrency holders were pulling their hair out. However, other, independent actors and perhaps from indifferent countries, have managed to stabilize the currency today, despite the eventual imposition of a ban on China, bitcoin "plays" very high on the stock market board. How long remains unknown…
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