Cryptoverse – How It All Began
Some argue that the blockchain technology used by the cryptoverse (cryptocurrencies) may take down Amazon, Facebook, and Google – a scary or a welcome idea?
There is a lot of hype, myth and speculation surrounding the cryptoverse: some wish to control it, some wish to destroy it, and some wish us all to buy into it. How much is fact, and how much is fiction?
Tim Draper argued that the cryptoverse is bigger than the internet, bigger than any revolution, bigger than anything we have seen; he believes that bitcoin, blockchains and cryptocurrencies will affect the entire world.
For those who find it hard to grasp these concepts, and struggle to produce a clear, straightforward definition, cryptocurrencies are everything one does not understand about money combined with everything one does not understand about computers.
And this is how it all began …
The total value of the world’s money is 215 trillion dollars, while the total global debt associated with that money is 300 trillion dollars (as of February 2022). Each new dollar created by governments and banks as debt will need to be repaid by someone (it does not matter who) at some point in the future. But that repayment of the initial debt is not enough: that debt also has interest attached to it, so that will need to be paid too.
There is not enough money in the world to pay off that debt and its interest – it is simply impossible. To add to the mind-bending complexity of it all, almost all the money in the world is in digital format: mere entries in very complex online banking ‘ledgers’.
Every pay cheque we get in the Western world (and not only), gets split between various bills we have to pay, leisure activities, or to repay existent debt. The greatest majority of the transactions we make is either via direct debit, bank transfer, credit or debit card transactions, Apple/Google Pay, PayPal etc.
All these transactions we make on a daily basis are nothing but pluses and minuses in digital legers stored online.
In 2008, at the peak of the financial crisis that almost crippled the world’s economy, a person or a group of persons using the pseudonym ‘Satoshi Nakamoto’ published a white paper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. This/these individual(s) are considered to also be the creators of the bitcoin technology itself: ‘With Bitcoin, we can create our own money … ‘
Stored in the virtual space, the cryptocurrency has no mass, no weight, no colour – in other words, it does not exist in the reality plane. And all this hype was started by none other than the multi-billionaire Roger Ver, also known as ‘Bitcoin Jesus’. To ensure his movement had a future, he gave away thousands of bitcoins; for free, that is.
If one could ascribe clear characteristics to bitcoin, one could simply call it anonymous cash that is not controllable by anybody. Ver calls bitcoin ‘one of the most exciting inventions ever in the entire history of humankind’ – is it, though?
There are more addresses in bitcoin’s virtual world than there are atoms in the entire universe. The digital coins (i.e., bitcoins) cannot be copied and can never leave their ascribed ‘deposit box.’ There is an infinite number of such deposit boxes in the ‘digital vault.’ No one owns the vault, and no one can tamper with the integrity of the ‘vault.’
Room 77, a bar in Berlin, was the first outlet to accept bitcoin as form of payment. And they did so over a decade ago, in 2011. There were no digital wallets back then, just laptops and a lot, a lot of very careful typing of the bitcoin addresses.
Credit cards manage almost 20 trillion dollars’ worth of transactions per year. The fees related to these transactions are included in the price of almost everything we buy, both goods and services. Part of cryptocurrencies’ attraction is represented by their take on the ‘institution,’ i.e., on the endemic corruption of massive global banks which have been found to launder money for criminals and drug lords, which have supported various political regime changes, which have unfairly charged customers for their mortgages and so on. There is an abundance of easily accessible and publicly available information on all these scandals.
Bitcoin and its many sister-cryptocurrencies were embraced by many, especially by the young and the digitally savvy generations, as a form of civil activism and civil rights movement, as a way of saying ‘no’ to the traditional, cumbersome, and inflexible banking and state-controlled or state-enabled wealth creation systems.
The big idea behind bitcoin is that of instantaneously being able to send money live, over the internet, with no ‘banking fees,’ no ‘transfer fees,’ no ‘urgency fees,’ no ‘currency exchange fees’ and no ‘transaction’ fees.
But who and what is actually running bitcoin and the cryptoverse? The answer to this question is not as simple as it may seem: they are run by a digital global network of very powerful mining computers. When a payment is made from one’s bitcoin wallet to another’s bitcoin wallet, that information is shared with the global hive network within seconds.
The ‘stackability’ of the blockchain transactions, including their inclusion into new layers of blocks, with uniquely numbered transactions, make futile any attempt to interfere with the transactions that have occurred since the updating of the global system; this updating takes a maximum of 10 minutes and every second thousands of transaction ‘layers’ are stacked atop a transaction that was made only a millisecond ago. To tamper with that transaction would mean to tamper with the entire ‘stack of layers’ of the other transactions.
The immutability of bitcoin means that no one can tamper with a transaction once made via blockchain, and no one can spend that uniquely numbered blockchain coin twice.
Is Bitcoin the real answer to financial freedom and independence for everyone? If we were all to adopt bitcoin now, what would happen with the world’s economic system as we know it? How long would it take us, as a global society, to recover from the financial crash and collapse of the banking system as it currently stands? How will the new ‘wealth’ be measured?
We will attempt to answer all these questions – and ask even more – in a future article. Stay tuned!