Perhaps digital currencies will not be, as their defenders propose, “as big as the printing press”, but their development bequeathed a great tool: blockchains as public data structures (or shared to all members of a network) applicable to old and new. new legal and civic operations. Faced with the old discretionary banking model, better a digital public archive.
The word bitcoin refers to two things: the digital currency and the network that supports it. It is impossible to understand anything without this basic concept. Bitcoin is a currency but it is also a network. One of P2P exchange - you may remember it from movies like eMule and Napster - that is, direct exchange between users. Only instead of exchanging movies, here a digital currency is exchanged, bitcoin. It is not an ordinary currency, as it does not have a backing in the physical world. But just as we value money because we use it, bitcoin works the same: it acquires its value in use, in exchange.
Bitcoin is managed with certain basic principles. The aim of a digital currency is to prevent by all means someone from using it without authorization. The system works by capturing each transaction in a file that all users have a copy of but cannot be modified by anyone. All copies are updated simultaneously so all users can see the entire transaction history. This prevents the same bitcoin from being spent twice. Then, that version of the file is saved and protected with cryptography, a mathematical method that protects information based on certain algorithms. It is possible to read it but not to modify it.
When a new transaction is added, a new block is generated that includes the original file, which is referred to by a generated number that is very difficult to copy. That guarantees the veracity of the current block. Bitcoin is ultimately an accounting book where each transaction is recorded and shared with all users. This chain of blocks that groups transactions is called "blockchain" (literally block-chain) and is the mainstay of Bitcoin. Unlike banks, which base their system on the trust that customers have, Bitcoin is based on a public file. In theory, the blockchain technology first implemented with bitcoin has the potential to take over the banks.
The design of this network also stipulates adding a certain fixed amount of bitcoins per year up to the limit of 21 million. That is the cap available. A bitcoin can be divided eight times up to the fraction of 0.00000001, which is named Satoshi after its creator, who remained anonymous until last year. The man in question, and on whom the controversy still hangs, is Craig Steven Wright, an Australian PhD in Mathematics.
Bitcoins are created through a process called "mining", which basically consists of putting your computer to work processing bitcoin transactions. Through an algorithm, what each computer does is validate transactions and receive a very small percentage of bitcoins in return. Mining is done by network users who have the computational power to capture new transactions, validate them and add them to the chain. And the transactions that are made outside the network, since they cannot be validated, are useless. This technology is the true heart of the system and a technology that tries to be replicated for a lot of other things.
Bitcoin is inspired by the cryptoanarchist manifesto written by Timothy C. May in 1992, in which he proposed the creation of a user network that eliminates all types of state or private intermediation. May claimed that the impact of creating a network of this type, protected through the use of encryption systems, would weaken the power of financial institutions, just as the printing press weakened the power of medieval guilds. May's prophecy came true with Bitcoin. Although it remains to be seen whether it will have a print-like impact, Bitcoin brought the ideas of the cryptoanarchic manifesto to reality and turned them into a real system using blockchain technology.
Bitcoin is a currency and therefore it is a payment system. While there are those who use it as an investment, in reality Bitcoin is not. What Bitcoin needs is that there is circulation and more payments made with the system. If instead users buy them to save and keep them, speculating to sell them when they are worth more, the system would tend to collapse as no one would sell and the price would plummet. The success of Bitcoin is not in the rise in its price but in the number of users that join the network. At the moment the price of BTC is USD 13,743. Last Saturday, the price of bitcoin rebounded for a few minutes above 14K, a level that is likely to break again in the coming days. Specialists point to resistance at $ 13,800 for now. In case of exceeding it, BTC has a serious chance of testing the new level, although electoral uncertainty will probably generate rebounds based on some unusual event.
It is not the first time that these promises have crossed the fiber optic networks and the minds of those who use them to communicate. From the invention of Napster to the establishment of streaming services as mainstream, 15 years and a lot of water passed under the bridge. Netflix would not exist without the onslaught of the entertainment giants against the networks that shared their content for free. The destruction of Megaupload and jail for the creators of The Pirate Bay were the nails in the coffin of the dream of a free internet. All the freedom that Napster promised us ended up reconfigured into a new hegemony.
The defenders of the blockchain argue that this problem is solved from the base, by the architecture of the system itself. Nobody can, in theory, appropriate the entire network. Or the computing power required to do so would make it unfeasible. But in the same way as with the early stages of the internet, this is going to be debated in the heat of the interests of capital and companies. As soon as their position is seriously threatened, they will go against the network or they will try to appropriate it. The idea of ??a world without banks makes everyone happy except the owners of the banks, the institutions with the greatest lobbying capacity on the planet.
Critics assure that it is a bubble, while its defenders warn that it is the new technological revolution to come. The truth is that the appearance of Bitcoin triggered that of other cryptocurrencies that even already compete with market shares. It is necessary to see to what extent financial capital can stop this phenomenon or appropriate it. Or perhaps, as its main defenders say, this will end up being a revolution similar to the appearance of the printing press.
We will have to see what happens first. But beyond the future of Bitcoin, the emergence of blockchain technology opens up the possibility of transforming any social practice in which the identity and veracity of a document must be protected. Its possible applications are the hottest topic within the community of programmers, who assure that in less than five years it will transform huge areas of daily life such as passports, mass online storage and even electoral processes like the one we are experiencing today .
