The Internet of Money: A summary of and thoughts on chapter one...
I’ve been reading The Internet of Money by Andreas Antonopoulos recently.
You can by the book here, it’s based on his lectures from a few years ago now!
It’s designed as a book for families to be able to understand Bitcoin, and crypto more generally, based on the ‘why’ of Bitcoin.
Below I’ve selected a few quotes from chapter one and consider how far some of the ‘potentials’ for Bitcoin raised by Antonopoulos have been realised…
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What is Bitcoin?
It is Disruptive technology.
Major quote: saying Bitcoin is money is like saying the internet is a fancy telephone’.
Bitcoin is a technology, it is a currency, and it is an international network of payments and exchange that is completely decentralized. It doesn’t rely on banks. It doesn’t rely on governments.
You can send it from any point in the world to any other point in the world instantaneously, securely, and for minimal or no fees at all.
Bitcoin was invented in 2008 by Satoshi Nakomto, no one knows who this person, or people is/are.
He invented a decentralized network that could achieve consensus, agreement, without any central controlling authority, overcoming the Byzantine general’s problem).
Bitcoin is not a company. It is not an organization. It is a standard or a protocol just like TCP/IP, or the internet. It’s not owned by anyone. It operates by simple mathematical rules that everyone who participates in the network agrees on.
Every ten minutes, the entire network agrees on what transactions have happened, without any centralized authority, by a simple election that occurs electronically.
Ignore the Bitcoin price! Currency is just the first application! (I think we all know what happened there!)
The invention of bitcoin, the technology that makes it possible, cannot be uninvented. It creates the possibilities for decentralized organization on a scale never before seen on this planet. Other applications include distributed fair voting, stock ownership, asset registration, notarization, and many other applications we’ve never thought of before.
Thoughts....
I think the above is a useful reminder of the difference between BITCOIN (and other cryptos) and FIAT, in short Bitcoin is….
- An international network of payments
- Decentrailised
- Not reliant on banks or governments or any cenntralised authority.
- Invented by an anonymous person
- At the centre of Bitcoin lie simple mathematical rules that everyone agrees on but no one controls.
- NOT just a currency….A Disruptive technology with possible application to voting, asset regulation and notarization.
I guess while most people focus very much on the price, the development of numerous blockchains besides BITCOIN prove Ant right, there are millions of people who have put in the effort to apply crypto technology to other areas!
The bitcoin block times over the past three years have fluctuated, but not by much, the largest being 24 minutes, and overall the times have been remarkably stable at around 10 minutes.
Today the largest Bitcoin transfer ever was valued at just over $1BN in 2020, or just over 100K Bitcoins, with the next four largest being for similar amounts, and all would have been for minimal fees with all of the above criteria being applied.
However, these largest ever transactions were most likely all exchanges moving funds around for security purposes, so not actual individual entities. Still, it proves the point that it is possible today to move around hundreds of millions of dollars for next to no money in less than an hour!
Money of the People/ Bitcoin as an option to opt out.
Approximately 1 billion people currently have access to banking, credit, and international finance capabilities—primarily the upper classes, the Western nations. Six and a half billion people on this planet have no connection to the world of money. They operate in cash-based societies with very little access to international resources. They don’t need banks. Two billion of these people are already onthe internet.
It’s not about us it’s about them - financial integration of the world. Kenyan farmer trying to raise money - truly life changing.
Thoughts
Bitcoin and other cryptos have been adopted enthusiastically in some developing countries, most notably in Venezuela where it has helped people combat hyperinflation, and it has even been adopted by El Salvador as a national currency.
However, it is mainly the rich in those poor countries who benefit, and restraints at the national level can make it difficult for people to get their crypto out to FIAT. The Nigerian government is, for example, notoriously anti-crypto.
So while this is happening Bitcoin and crypto more generally have yet to become widespread solutions to world poverty.
Currencies, Businesses and Payments
Bitcoin solves two problems - distribution and payments.
The internet solved the former (now that so much business is online) Bitcoin the second, and we can send 100 millionth of a Bitcoin. BTC is made for the internet age.
Thoughts
Bitcoin has this potential yes, especially with the development of the Lightening network, but outside of purchasing other crypto assets with crypto (such as Splinterlands cards) I don’t think I’ve made one other purchase with Crypto.
I even bought The Bitcoin of Money with ‘dirty fiat’ because it was easier, I simply don’t have easy access to pay with Crypto, it’s too much hassle!
Neutrality, Criminals and Bitcoin
Neutrality allows an Egyptian blogger to speak with the same power as CNN (hmmmmm!?!?! And where is this neutrality?)
Bitcoin is neutral it allows every individual to operate at the same level as Citibank
Bitcoin Turns a hierarchical financial system on its head - security achieved by limiting access.
With BTC you don’t need to ask anyone to set up a new payment service, you just do it!
The fact that it is used by Criminals doesn’t matter - internet used to be like that - we can still use it for good!
Bitcoin is a currency, a technology and a network, making it ripe for innovation.
Thoughts
As with issues surrounding the potential for Bitcoin to help developing countries, the same is true here – there is lots of POTENTIAL for Bitcoin to flip power structures on their heads, but entrenched institutions make this difficult.
Crypto movements are still subject to international regulation, don’t forget!
Altcoins: Currencies for Everyone/ Programmable Money for All of Us
There are more than 200 FIAT currencies, but crypto allows for money to be controlled by everyone.
We can now invent money nonstop because the technology is there and you cannot un-invent it!
We can take many of the basic concepts of the current system that depend on legal contracts, and we can convert these into algorithmic contracts, into mathematical transactions that can be enforced on the bitcoin network. As I’ve said, there is no third party, there is no counterparty.
Thoughts
Well yes this certainly happened in the DEFI Spring of 2021, but I’m not sure that was a good thing.
What we need now maybe is for some of the more dodgy cryptos to die out and more focused development on the ones that actually work!
Conclusion: Bitcoin is a revolutionary technology that will change the world forever!
Hmm, again it has the potential, but it hasn’t changed the world yet.
For sure there are a few more millionaires and billionaires that would no way be that rich if it were not for crypto, but truly life-changing for the masses, not yet!
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