By: L. Maksoud
I’ve often found myself wondering what is bitcoin? Almost everyone knows it’s a sort of cryptocurrency, or in other words, a digital currency. But not everyone knows where it comes from or how can you invest and withdraw the money you put in. No one knows who created bitcoin. So, for a better understanding we need to know about money itself. Money has two main purposes which are to store wealth and to make transactions. It also hasn’t been around for relatively a long time. Before, we used to trade, so I would give you a pair of shoes for a barrel filled with rice, which that’s not really convenient. What if my village were invaded and I had to run away and take my barrel of rice? Or you had nowhere to put your shoes? That’s why humanity invented money, defined by economists as “anything commonly accepted by people for the exchange of goods and services.”.
No one knows exactly when money was first invented, but around 700 B.C, people begun trading any metal objects since they looked like they were worth a lot, so the Lydians invented coins. But gold and silver and other metals are hard to mine and are scarce. Because of this, people created paper bills. Besides their hard forgery and scarcity, they seem to come without any other flaws, but with paper and metal, currencies come with many limitations.
There is no privacy, so if you’re making a large transaction, let’s say $4000, your bank will notice, other banks (e.g. the federal reserve, the local reserve bank, etc.) and government agencies will know (IRS, NSA…). There are loads of fees, so if I want to send money to China, this money will go through my bank (which will charge a fee), through the local reserve bank (charging another fee) through the international wiring system (another fee) and so on. Money can be forged easily, around $200 billion of forged money is circulating around the world right now. But human errors are probably one of the worst flaws in the economic system since humans have lots of opportunities to do stuff wrong. Your money could be sent to the wrong account during a transfer, a bank’s software could be hacked and all your money could be lost.
But what backs up paper money? As the saying says, a dollar is a piece of paper, as gold is just a rock. But have you noticed how special they make money look? Take the dollar for example, they add in sayings such as ‘In God we trust’ on it to make it seem like some sort of religious relic, or a politician’s face to add extra importance, they even put a signature of the Secretary of Treasury to make it like a contract. And to all my conspiracy theory friends out there, a pyramid with an eye on it.
Going back to bitcoin and cryptocurrencies, they solve all the problems stated above! There is no printing money, meaning no hyperinflation. However, like all other currencies, it can be hacked and all your money can be stolen - never to be seen again. But you can get storage devices, store your money in a safety deposit box; there’s plenty of backup. The software even guarantees that the money can’t be faked. Some bitcoin transactions do have fees, but none as big as paper money, bitcoin guarantees privacy as you can anonymously send money so no government institution can be aware of any changes in your account.
It can be said that in the near future, cryptocurrencies will replace all paper money and coins. Right now, countries like Israel, Estonia and Venezuela are already debating on relinquishing their currencies. China, Korea, Russia and the USA will soon implement aspects of cryptocurrency technology to their economy.
Now why does everyone talk about bitcoin so much? It’s only worth $300 billion…pfft… but that’s only a third of Apple Inc’s worth. Well, for starters, it has been an amazing way to earn money for the last two years, as years ago, one bitcoin cost about £300 and now, it’s worth £300,000. But bitcoin is just like a donut- sweet but filled with holes.
No one knows who created it. It is said that it was a man who goes by the name of Satoshi. It’s just a Japanese name with the possible writings of “Philosophy”, “enlightenment” … He’s worth billions of Bitcoins right now, but no one knows who it is.
This leads us to the first theory. Either he’s a mentally unstable, anti-social man or he’s covering up for the fact that he invented the currency for a secret organization such as the FBI or the CIA. But there’s also another theory which comes from the weird side of the internet, being that Satoshi is actually a rogue AI which created the program. The code is too perfect. So maybe it wasn’t created by a skillful programmer at all, but by an extremely advanced Artificial Intelligence. Some even regard the AI as being sent and created by aliens so they can expand their robot’s information through the network.
The second theory originates from the fact that the government has been reluctant to shut bitcoin down, despite it violating all “Anti-Money Laundering” and “Know Your Customer” regulations. So, why haven’t they done anything about it? There is an agreement by FXSTREET which states that the government’s goal is to wait until the public trusts these cryptocurrencies, to then replace them all with a government sanctioned bitcoin. This would completely replace all physical currency, allowing them to take control. This is highly probably when countries like China, the USA and Russia are vying for economic dominance.
It really does seem as if bitcoin is a creation out of a spy movie, maybe it is portrayed as something straight out of a Hollywood film with a purpose. Maybe this is an existing or not yet existing government trying to direct our attention to watching the values of a virtual coin so that we don’t pay attention to something else. There’s still a lot we don’t know. Because if you are gaining money, but no one seems to be producing, someone has to be losing. But who?