How I present Bitcoin without going into technical details.
Explaining Bitcoin to a noob is extremely difficult. So instead of describing the technical functioning of Bitcoin (blockchain, distributed consensus, digital signatures, blablabla...), the method I often use is to expose five aspects of our society that Bitcoin and cryptos are challenging. Five fact that are challenging people beliefs.
1 — Money is nothing more than a service
Money As A Service. In our society, money has such an important position, we forget that ultimately it is nothing more than a service (it is use to transmit value from a person to another and to transform it to anything you want). If one conceives it as such, then one can only wonder why the central banks and private banks are the only one who have the right to provide this service. It is this monopolistic situation that bitcoins and cryptos are challenging.
2 — A bitcoin can be considered as 3 types of assets at the same time
In our society, we distinguish three types of asset:
- currency (dollar, euro, yen, yuan…)
- commodity (gold, oil, wheat, cocoa…)
- security (stocks, bonds…)
In the case of Bitcoin (and crypto), the bitcoin ‘unit’ is both a currency, a commodity and a security. And it must be considered the 3 types of property at a time. Deal with it. Without it you can not understand the behaviors and motivations of the actors around the Bitcoin.
3 — The Bitcoin protocol is a monetary system
In our society, a monetary system consists of 4 elements:
- a currency
- a central bank (for issuing the currency)
- private banks (to store your money)
- payment systems (credit card, Paypal, bank transfer, cash)
In the case of Bitcoin, this fragmentation is no longer relevant. The Bitcoin protocol plays the role of these 3 institutions together. The Bitcoin protocol is a monetary system.
4 — With Bitcoin, the creation of money equals to the compensation
In our banking system, we distinguish between money creation (which is the responsibility of central banks and to some extent private banks) and remuneration (which is the responsibility of economic agents, individuals, companies, merchants …) But with Bitcoin, money creation and compensation correspond to the exact same function. (This is one of the most puzzling fact for people)
Indeed, “miners” who work tirelessly to verify, validate and secure transactions are paid in bitcoins with freshly created coins by the Bitcoin protocol. Money creation is completely decentralized by the protocol via the remuneration of miners. With Steemit, we have seen that the remuneration is divided amongst very different actors (writers, user, market makers, miners…)
5 — The human organization around Bitcoin corresponds to 3 forms of organization
In our society, below the banking system and the governments, we can distinguish three main types of organizations:
- companies
- non profit organisation and ngos
- political parties
What about the “organization” behind the Bitcoin protocol? The network that has formed around the Bitcoin protocol to maintain, improve and promote is not a company (or even a startup), not a non profit organisation, not a political party. But it is all at once. This network has the characteristics:
- a political party because Bitcoin’s mission is eminently political: disrupter the entire monetary system. Let us not forget the wealth of crypto-anarchist values, libertarians and anarcho-capitalists which this protocol is the embodiment.
- an association because the open-source community around the work as volunteers for the majority Bitcoin without being paid by anyone (apart from the miners).
- a business because the profit motive is not absent, all these players have undoubtedly a significant amount of Bitcoin and they have every interest in this protocol to be adopted as widely as possible for the value of bitcoin appreciates. Recall that bitcoin can be considered as a “stock.”
