Bitcoin explained easily distracted
The great achievement of Bitcoin is that we have the very first "socially sovereign" digital currency, independent of government and corporation, that is workable, technically bitcoin explained easily distracted to peer", and that it creates the enthusiasm of the hacker community, which almost certainly means it will be adapted and used later by more people.
So, in this way, this is a tipping point. However, the Bitcoin design may also have some serious flaws. First of all, the way it is mined privileges the technical community itself as it can have access to networks of botnets to generate coins, in a way most people can't. Secondly it is a 'scarcity' based currency, subject to hoarding and wealth accumulation only 21m bitcoins will be created, insuring a constant growth in valuethat bitcoin explained easily distracted not really change what is 'wrong' with the current currency system.
As many so-called 'peer to peer' technologies such as crowdfunding, crowdsourcing, etc. Nevertheless, what it really shows is that socially sovereign currencies are viable, and could be created as a tool of the countereconomy, though this may require a different ruleset for its functioning.
At Kakigarden we're developing a solution that is immune from those issues, and in our opinion some important things to improve are:.
As I outlined bitcoin explained easily distracted answering How can Bitcoin be hacked? It's a beautiful concept but it's not secure. It can be exploited, which means it will. It's just a matter of time.
The scarcity of Bitcoin is not a real, hardcore scarcity such as the scarcity of gold or platinum. It's just defined in some lines of code. Those lines can be bitcoin explained easily distracted, Bitcoin can indeed be inflated bitcoin explained easily distracted loose all of its appeal.
There is a variety of ways bitcoin explained easily distracted which this can happen in practice. More scarily, there is hardcore economic evidence that doing so would actually benefit Bitcoin as a currency see below.
Again, if it can, it will. Bitcoin is not really P2P. As always with centralization, these two weak points are also the easiest single points of failures to exploit. In economics, a liquidity trap happens when people are unwilling to invest and keen to keep their assets "under the pillow".
That's exactly the trap Bitcoin is falling in and will fall in. It was actually designed for it. Bitcoin is a deflationary currency, which means it's worth more and more as time goes by.
It did to the developers, but it actually isn't. In Gresham's terms Bitcoin is good money, while inflated central banks' money is a bad one. What would you spend first? The bad money, because you want to get rid of it, and keep the good one for yourself. The only exception to this are illegal businesses who don't have any alternative to Bitcoin, or people where central bitcoin explained easily distracted have failed or are failing as Somaliland or Zimbabwe.
This means that, with the aforementioned exceptions, Bitcoin is not actually a currency as it appears to be, but rather a digital store of value that can be used as a currency. As soon as the US government will rule against Bitcoin, which could happen sooner than we think, all US businesses will be forced not to accept Bitcoin. Maybe even running the client could be deemed illegal. This will trigger drops in BTC value because the expectations for Bitcoin as a currency will drop.
As other governments will follow, as it already happened with Napster and file sharing, the use bitcoin explained easily distracted Bitcoin will be more and more restricted to criminals and illegal activities, and people where central banks have failed or are failing as Somaliland or Zimbabwe. As soon as a better p2p currency comes along, people can sell their BTCs and jump on the other system. This means that as soon as a better alternative comes along, there will be an incentive to be the first to abandon Bitcoin, while the last ones will be heavily penalized: Think of bank runs: Here there's no bank, so what's gonna happen when the run starts?
If you own Bitcoins, keep your eyes open. The current value of BTCs is artificial. They don't buy Bitcoins because they need them, but because they expect somebody will need them in future. And you know what?
This is very risky, because Bitcoin has no intrinsic value. This means that as soon as it is hacked, or government intervenes, or a better alternative comes along, the value of Bitcoins can drop to zero.
That's the intrinsic value of a digital signature. Gold has an intrinsic value: You can't buy Bitcoins with Paypal. You can't convert Bitcoins to Paypal. The value of Bitcoin fluctuates enormously every day. All this means there is friction bitcoin explained easily distracted the average person and the average business to use Bitcoins as a currency instead of the dollar.
Again, only who's got no alternatives is really driven to use Bitcoin see above. Remember how George Soros broke the British Pound? Currencies don't belong only to the domain of economics, but also to that one of politics. And that's why central banks have policies. If a speculator like Soros comes along with their massive buying power, they can start to use their power to do politics on the Bitcoin community, and there's no Bitcoin authority that can react.
For example, a speculator can enter slowly in a massive quantity, and then sell enough bitcoin explained easily distracted fast enough to trigger panic in the community and push Bitcoin owners bitcoin explained easily distracted panic sell something similar already happened in Bitcoin's "black friday" on June 10th.
Such attack could be politically motivated, or financially to buy after the price drop. Bitcoin has no protection against those types of attacks. Bitcoin doesn't have the safety net of real goods, nor the one of fiat currencies. Bitcoin is not anonymous. As one of the lead developers already pointed out, it's fairly easy to track people down unless they don't take extreme precautions. Transactions take minutes, or even hours, to be confirmed. Given it's electronic and not physical, this slowness is a bit of a paradox.
Bitcoin doesn't stop middlemen from practicing fractional reserve banking, thus inflating the currency at their own benefit. In fact, this is probably what will happen and what could partly relieve its deflationary nature. This is the bitcoin explained easily distracted of the iceberg. There is much more to bitcoin explained easily distracted future p2p currencies objective value vs subjective value, scarcity vs abundance, etcbut I feel this is a concise enough answer to the question, specifically focused on Bitcoin's immediate weaknesses rather than what the mid-term future of currency might look like.
As I said, think of Bitcoin as the Napster of central banking and banking as we've known them. The future p2p currencies will have to solve Bitcoin's technical and economical flaws, and totally redefine economics. Contrary to what most economists from Mill to Schumpeter believe, currency is not a neutral veil, but indeed the very matrix of how we interact, trade and live as a species.
As every language influences the way one thinks, currency influences the way one behaves. Mainstream currency is the most powerful and spoken language on our planet, and in the next decade it's going to be totally redefined by the Internet. The next generation will have a hard time trying to understand what economics was to us. Bitcoin, described most generously, is a system that makes digital transactions more like cash transactions. The problem is it does this not by offering dollar-denominated digital cash-transfers, but by bootstrapping an entirely new currency.
The question to ask is why this would be bitcoin explained easily distracted all desirable. Maybe you hate the US government, or all governments. Maybe you want to avoid bank interchange fees, or bitcoin explained easily distracted avoid tracking altogether because your payment is for something illegal, or because you're a particular private person. Or perhaps you just think that the world currency regime is going to collapse and you see Bitcoin as a technological salvation.
No matter what your reasoning, Bitcoin is a ridiculous idea that will not accomplish what you want. When the federal reserve "prints money", it doesn't just mail million-dollar checks to random Americans. It does one of two things. It either a purchases some other asset [generally us treasury bonds] on the free market, thereby injecting more cash into the system than bitcoin explained easily distracted had been before, or bloans money to a bank, who will then loan it to other people who will then spend it.
Importantly, the people on the other bitcoin explained easily distracted of those transactions did not just get free money. They either sold an asset for cash, or they borrowed cash that they will eventually repay with interest.
Bitcoin does not have a central bank capable of printing and lending Bitcoin; it has an "algorithm" which through some convoluted mechanism allows Bitcoins to be "mined". Essentially it randomly allocates Bitcoin to early adopters. This is a very good system for early adopters free money! It is a nonsensical system for a real currency, not to mention being obviously unscalable what happens when everyone tries to mine Bitcoin all day long?
To solve this second problem, the supply of Bitcoin is algorithmically limited, which is again good for early adopters. But that brings us to Deflation is the phenomenon where cash grows in value relative to everything around it i.
More specifically, deflation occurs when people expect the value of cash to grow in relative value to everything around it, and prices trend down consistently. The supply of Bitcoin is programmed to grow at a known but decreasing rate over time, topping out relatively quickly at about bitcoin explained easily distracted. The graph looks like bitcoin explained easily distracted.
Known rate -- ok, I'm with you, predictable inflation, not necessarily desirable from an economic standpoint, but I'll go with it -- but decreasing rate? If you were designing a currency that was going to topple the world order, wouldn't you want it to look like this?
Or at least have constant in rate of growth? Yes, of course you would, because that's the only way to actually accommodate more people using it.
In fact, if we all stopped believing in it, it would have no use at all! It is, of course, money. But not just any money, in this 6 minute English, we'll be talking about the infamous Bitcoin. Is it the same as 'real' money? Can it be trusted? Dan and Neil discuss the issue and teach you six items of vocabulary. Dan Hello and welcome to 6 Minute English.
I'm Dan and joining me today is Neil. But what about the cryptopart? Dan Well, crypto is a prefix meaning hidden or secret — it comes from the word cryptic which means mysterious or difficult to understand. You may have heard about the most bitcoin explained easily distracted crypto-currency at the moment, the Bitcoin.
Dan First our quiz question. When was the Bitcoin crypto-currency first created? So…Bitcoin, what do bitcoin explained easily distracted know about it? Dan You are right on the money, which means correct, both times. Bitcoin is just bitcoin explained easily distracted any other currency except for two things.
Neil Legal tender means the official money that can be used within a country. You can use it to buy items from anyone who will accept it, and its value fluctuates. Neil Fluctuates means changes in level or amount. Dan Ah, the second thing is that bitcoin is a digital currency, meaning that with the exception of a few tokens, it largely exists online only.
You see, even though Bitcoin is not regulated by a bitcoin explained easily distracted or government, it still has a process that stops people from cheating. There are only two ways to get bitcoins.
You either trade them from someone, or you go mining. Neil Oh wait, I've heard about this. This is when you use your computer to run calculations which verify other Bitcoin transactions.
In fact, one stock exchange in Chicago has begun trading in Bitcoin futures contracts. Neil A futures contract? That means that investors believe Bitcoin, which started the year worth under dollars will continue to rise in value, albeit at a slower rate.
Neil Soared in this context means increased very quickly. So, now big investors are betting on the value of Bitcoin in the future.
But he also mentioned that the banks have a lot of scepticism. That's a doubt that something is real or true. In this case, whether Bitcoin is reliable bitcoin explained easily distracted not.
After all, a fool and his money are soon parted. We know that for a fact. I asked you when the Bitcoin crypto-currency was first created. Neil First we had currency. Name three currencies and their countries, Dan. Rupee for India and my favourite, Metical for Mozambique. Next we had cryptic. Something which is cryptic is mysterious or difficult to understand. For example, what do rich people need, poor people have and if you eat it, you die? Neil A cryptic riddle indeed! The Euro is legal tender within Spain, but what was the legal tender before that?
Then we had fluctuates. If something fluctuates, it changes in amount or level. The stock market fluctuates. Neil But my love for my family never does. Then we had soaredwhich means increased very quickly. Dan Finally we had scepticism. Scepticism is doubt that something is real or true. What sort of bitcoin explained easily distracted are people sceptical about, Neil? Are robots and artificial intelligence taking over from humans? Dan and Neil discuss the rise of the machines.
Are you trying to give up drinking this month? Catherine and Rob discuss abstaining and the benefits of a dry January. Would you pay more for coffee if you knew it was doing some bitcoin explained easily distracted Dan and Catherine discuss the pros and cons of ethically produced coffee. Bitcoin is here and it's generating interest. Is that a good or bad thing? Dan and Neil discuss the pros and cons bitcoin explained easily distracted this digital currency.
Can science prove the existence of 'man flu' or are men just big babies? Dan and Neil discuss all this and give you six useful items of vocabulary. A popular job at this time of year is playing the part of Santa. But what does it take to be the perfect Father Bitcoin explained easily distracted Neil and Dan discuss whether it's a role that would suit Dan. The number of schoolchildren doing part-time jobs in the UK has fallen. Is that a good thing? Neil and Dan discuss the pros and cons of working while you're still at school.
Tim and Neil talk about interactions that can be misunderstood by people of different bitcoin explained easily distracted. Relax, slow down and breathe. Neil and Catherine explore mindfulness - what it is and what benefits it offers. Are you an emoji person?
We explore how simple smiley faces have become bitcoin explained easily distracted communication tools. What do you eat for lunch? Sandwiches are the most popular lunchtime meal in the UK, but why? Catherine and Neil discuss why the police and the legal system bitcoin explained easily distracted concerned about eyewitness testimony. Catherine and Neil discuss how the pressures of modern living are making us hostile to each other.
Why are so many people obsessed with learning about their family history? Neil and Catherine talk about genealogy. The increased study of extremophile microbes has revealed a lot about what is and is not needed to sustain life on Earth. Why are we so fascinated with the superheroes that populate our cinema screens and comic books? Alice and Neil discuss whether we would miss driving as driverless cars are tested in cities around the world.
Alice and Neil talk about their preferences. Alice and Neil discuss circadian rhythms — the so-called body clock that influences an organism's daily cycle of changes. Why do we fear animals that pose no threat to us? Sophie and Neil discuss the reason why fear of spiders is so common. Neil and Alice talk about the defiant women who fought for their right to choose their representatives.
Call them what you want — trainers, sneakers, tennis shoes — but why does everybody love them so much? Sophie and Neil discuss social networks and why we often use different identities for different social media. Free, digital news is threatening traditional newspapers. Sophie and Neil discuss the pros and cons of news in print. Why are we attracted to some people and not to others?
Sophie and Neil discuss love at first sight. What is loneliness and why do we feel it? Sophie and Neil discuss how feeling lonely can help us to survive. How do you see yourself and how do others see you? Alice and Neil discuss identity and how appearances can be deceptive. Why is punctuation important?