If you are struggling to understand HOW Cryptocurrency and Bitcoin All Works and HOW It Is Becoming the Future Of Money…Please Watch And Listen To This Video When You Have 16 Minutes And 14 Seconds…Its all presented in a SIMPLE and EASY NON CONFUSING WAY!
The Future Of Money
I wish to tell you about the future of money. Let's start with a story about this culture that resided in Micronesia in the early 1900s, called the Yap. Now, I wish to inform you about the Yap due to the fact that their kind of loan is actually interesting. They use these limestone discs called Rai stones. Now, the Yap do not in fact move these Rai stones around or exchange them the way we finish with our coins, since Rai stones can get to be quite enormous. The biggest is about 4 heaps and 12 feet across. So the Yap just track who owns part of what stone.
There's a story about these sailors that were carrying a stone across the ocean when they faced some problem and the stone really fell in. The sailors got back to the main island and they informed everybody what had actually taken place. And everybody chose that, in fact, yes, the sailors had the stone and– why not?– it still counted. Despite the fact that it was at the bottom of the ocean, it was still part of the Yap economy.
You might believe that this was simply a small culture a hundred years ago. However things like this happen in the Western world as well, and the Yap actually still use a kind of these stones.
In 1932, the Bank of France asked the United States to transform their holdings from dollars into gold. But it was too bothersome to think of really delivering all of that gold over to Europe. So instead, someone went to where that gold was being kept and they just labeled it as belonging to France now. And everybody agreed that France owned the gold. It's just like those Rai stones.
The point I wish to make with these 2 examples is that there's absolutely nothing naturally important about a dollar or a stone or a coin. The only factor these things have any worth is due to the fact that we have actually all chose they should. And because we have actually chosen that, they do. Money has to do with the exchanges and the transactions that we have with each other. Cash isn't really anything unbiased. It's about a cumulative story that we tell each other about value. A cumulative fiction. And that's a truly powerful idea.
In the past twenty years, we've started to use digital money. So I earn money through direct deposit, I pay my lease through bank transfer, I pay my taxes online. And every month, a small amount of money is subtracted from my paycheck and bought mutual funds in my retirement account. All of these interactions are actually simply altering 1's and 0's on computers. There's not even anything physical, like a stone or a coin. Digital money makes it so that I can pay somebody worldwide in seconds.
Now when this works, it's because there are big institutions financing every 1 or 0 that changes on a computer. And when it doesn't, it's typically the fault of those large organizations. Or at least, it depends on them to repair the problem. And a great deal of times, they don't. There's a lot of friction in the system. How long did it take the US charge card business to carry out chip and pin? Half my charge card still don't work in Europe. That's friction. Transferring cash throughout borders and across currencies is actually pricey: friction. An entrepreneur in India can set up an online company in minutes, however it's tough for her to obtain loans and to get paid: friction. Our access to digital money and our capability to freely transact is being held captive by these gatekeepers. And there's a great deal of obstacles in the system slowing things down.
That's since digital money isn't truly mine, it's entries in databases that come from my bank, my charge card business or my investment firm. And these business have the right to say “no.” If I'm a PayPal merchant and PayPal mistakenly flags me for scams, that's it. My account gets frozen, and I can't get paid.
These institutions are standing in the method of innovation. The number of you utilize Facebook images, Google Photos, Instagram? My photos are everywhere. They are on my phone, they're on my laptop, they're on my old phone, they remain in Dropbox. They're on all these different websites and services. And the majority of these services do not collaborate. They don't inter-operate. And as a result, my image library is a mess.
The exact same thing takes place when institutions control the cash supply. A great deal of these services do not inter-operate, and as a result, this blocks exactly what we can do with payment. And it makes transaction costs increase. So far, we've been through two phases of money. In an analog world, we had to deal with these physical objects, and money moved at a specific speed– the speed of people. In a digital world, loan can reach much farther and is much quicker, however we're at the mercy of these gatekeeper organizations. Loan just moves at the speed of banks.
We're about to go into a new phase of money. The future of loan is programmable. When we combine software application and currency, loan becomes more than simply a fixed system of value, and we do not have to rely on institutions for security. In a programmable world, we remove humans and institutions from the loop. And when this takes place, we will not even feel like we're transacting any longer. Loan will be directed by software, and it will just securely and securely flow.
Cryptocurrencies – The Future Of Money
Cryptocurrencies are the initial step of this evolution. We can say Cryptocurrencies are the future of money. Cryptocurrencies are digital money that isn't really run by any federal government or bank. It's money designed to work in a world without intermediaries. Bitcoin is the most ubiquitous cryptocurrency, however there are numerous them. There's Ethereum, Litecoin, Stellar, Dogecoin, and those are simply a few of the more popular ones. And these things are real cash. The sushi dining establishment down my street takes Bitcoin. I have an app on my phone that I can use to purchase sashimi. However it's not just for little deals. In March, there was a transaction that moved 100,000 bitcoins. That's the equivalent of 40 million United States dollars.
Cryptocurrencies are based on an unique field of mathematics called cryptography. Cryptography is the research study of how to protect interaction, and it's about 2 really crucial things: masking information so it can be hidden in plain sight, and verifying a piece of info's source. Cryptography underpins so many of the systems around us. And it's so powerful that at times the United States government has actually categorized it as a weapon.
Throughout The Second World War, breaking cryptosystems like Enigma was crucial to decoding opponent transmissions and turning the tide of the war. Today, anyone with a modern web browser is running a quite advanced cryptosystem. It's what we use to secure our interactions on the Internet. It's exactly what makes it safe for us to type our passwords in and to send financial details to sites. So what the banks utilized to give us– credible digital money transfer– we can now get with a creative application of cryptography. And this indicates that we don't have to count on the banks anymore to secure our transactions. We can do it ourselves.
Bitcoin is based on the very same idea that the Yap utilized, this collective international understanding of transfers. In Bitcoin, I spend by moving Bitcoin, and I make money when someone transfers Bitcoin to me.
Picture that we had this magic paper. So the manner in which this paper works is I can provide you a sheet of it and if you write something on it, it will amazingly appear on my piece also. Let's say we simply offer everybody this paper and everybody jots down the transfers that they're performing in the Bitcoin system. All of these transfers get copied around to everybody else's papers. And I can look at mine and I'll have a list of all the transfers that are occurring in the whole Bitcoin economy. This is actually what's occurring with the Bitcoin blockchain, which is a list of all the deals in Bitcoin. Other than, it's refrained from doing through paper. It's done through computer code, operating on thousands of networked computers all over the world. All of these computer systems are collectively validating who owns what Bitcoin. So the Bitcoin blockchain is core to how Bitcoin works.
Where do bitcoins in fact come from?
Well, the code is created to develop brand-new Bitcoin according to a schedule. And the way that it works is that to get those Bitcoin, I have to resolve a puzzle– a random cryptographic puzzle. Picture that we had 15 dice, and we were tossing these dice over and over again. Whenever the dice turn up all sixes, we state that we win. This is very near what these computer systems are all in fact doing. They're attempting over and over again to land on the ideal number. And when they do, we state that they have actually solved the puzzle.
The computer that fixes the puzzle releases its service to the remainder of the network and gathers its reward: new bitcoins. And in the act of fixing this puzzle, these computers are really helping to protect the Bitcoin blockchain and add to the list of deals.
There are actually people all over the world running this software, and we call them Bitcoin miners. Anyone can become a Bitcoin miner. You can go download the software application right now and run it in your computer and attempt to collect some bitcoins. I can't say that I would recommend it, because right now, the puzzle is so tough and the network is so powerful, that if I attempted to mine Bitcoin on my laptop computer, I probably would not see any for about two million years. The miners, expert miners, utilize this unique hardware that's created to resolve the puzzle really fast. Now, the Bitcoin network and all of this special hardware, there are estimates that the quantity of energy it uses is equivalent to that of a little country. So, the very first set of cryptocurrencies are a bit slow and a bit troublesome. However the next generation is going to be so much better and so much quicker.
Cryptocurrencies are the initial step to a world with a global programmable loan. And in a world with programmable loan, I can pay anybody else safely without needing to register or ask permission, or do a conversion or fret about my cash getting stuck. And I can send out cash all over the world. This is an actually amazing thing. It's the concept of permission-less development. The Internet triggered an explosion of development, due to the fact that it was built upon an open architecture. And much like the Internet altered the way we interact, programmable money is going to alter the method we pay, assign and pick value.
What kind of world does programmable cash develop?
Imagine a world where I can rent out my health care information to a pharmaceutical business. They can run massive data analysis and offer me with a cryptographic proof that shows they're only using my information in a manner that we agreed. And they can pay me for what they learn. Instead of registering for streaming services and getting a cable television costs, what if my tv analyzed my enjoying practices and advised well-priced content that fit within my spending plan that I would delight in? Think of a Web without ads, due to the fact that instead of paying with our attention when we view content, we simply pay.
Surprisingly, things like micro-payments are in fact going to change the way security works in our world, due to the fact that when we're much better able to allocate value, people will use their money and their energies for more positive things. If it cost a portion of a cent to send an email, would we still have spam?
We're not at this world yet, but it's coming. Today, it resembles we remain in a world that is seeing the first car. The first cryptocurrency, like the very first automobile, is slow and hard to understand and hard to use. Digital money, like the horse and carriage, works pretty well, and the entire world economy is built on it. If you were the very first person on your block to obtain an automobile with an internal combustion engine, your neighbors would most likely believe you were crazy: “Why would you want this big, clunky maker that breaks down all the time, that lights on fire, and is still slower than a horse?” However all of us understand how that story turns out.
We're going into a brand-new age of programmable cash. And it's really interesting, but it's likewise a little bit frightening. Cryptocurrencies can be utilized for prohibited transactions, just like cash is utilized for crime worldwide today. When all our deals are online, exactly what does that mean for monitoring– who can see exactly what we do? Who's advantaged in this new world and who isn't really? Will I need to start to spend for things that I didn't have to pay for in the past? Will all of us become servants to algorithms and utility functions?
All brand-new technology features compromises. The Internet brought us a lot of ways to lose time. But it also greatly increased efficiency. Mobile phones are annoying due to the fact that they make me seem like I have to stay connected to work all the time. However they also help me remain linked to family and friends. The brand-new sharing economy is going to remove some jobs. However it's likewise going to produce brand-new, versatile forms of employment. With programmable loan, we decouple the requirement for large, relied on institutions from the architecture of the network. And this pushes development in cash out to the edges, where it belongs. Programmable loan democratizes cash. And because of this, things are going to change and unfold in ways that we cannot even forecast.