08 The Pillars of Bitcoin

08 The Pillars of Bitcoin

Pillars of a fair Decentralised System Of Money

There are some of the properties people have put forward of a money that is fair and for the people, by the people. If some or all of these properties are missing, then it is not a good decentralised system for all. Here are some brief descriptions of each feature.

Permission-less

A currency that allows you to build anything you want on top of it, without the need to seek permission. You need permission from apple before you launch an app on their app store, but with bitcoin, you can build whatever structure or system on top of it.

Borderless

No matter where you go in the world, your money is always with you and you don’t need permission for it to follow you. Just like you don’t need permission to wear your own underwear, you shouldn’t have to need permission where you take your wealth.

Neutral

Money should not discriminate. Many may think “But what about criminals and ‘bad people’ why should they be allowed”. The answer is simple, “who decides who is  a criminal or ‘bad’. The moment we start having this conversation defining who should be allowed to use the money, then we have already lost. History has taught us that humans have always abused this power and always used this to oppress people, whether it be the Jews in the holocaust, the Palestinians in Palestine, the Ugurs in China, this power has always been used to oppress more than it has been used to help or stop crime.

Censorship Resistant

Money should not be allowed to prevent some transactions from happening or reverse them. Much like the people of Iran or other countries who find they cannot engage in commerce with other people, they find money flowing in and out of their lands to be censored by third parties.

Public

One of the easiest ways of corruption is when things are done in secret and behind closed doors. We are not allowed to know what goes on in the Federal reserve bank nor are we privy to know who are its owners (Because central banks are private companies, not government bodies). But with bitcoin, every single coin is public and visible to all. If I send you bitcoin, anyone can check that I sent it as long as I have the transaction ID.

Trustless

Throughout the ages, as we’ve seen when discussing the history of money, that at every stage of the journey we’ve had to ‘trust’ someone. We had to trust the guy who said he would ‘pay you back’ (debt), we had to trust that the gold or silver coin was the exact weight and purity that we were told it was, we had to trust that the certificate we had in our hands was actually backed up 1:1 with the coin it represented, we had to trust the governments wouldn’t defraud us by printing more money than they should. But with bitcoin, you don’t need to trust anyone. The underlaying principle is to NOT trust anyway. You can run a node yourself and verify each and every transaction yourself without having to trust a single sole.The system is secured with mathamatics.

Digitally Scarce

The currency cannot be printed upon demand or at will. It has to be ‘scarce’ just like gold, silver and all previous forms of money have been scarce. The moment the money becomes something that anyone can print or make on demand, it no longer has any value. Bitcoin will only ever have 21 million coins, and the actual number is even less than that due to lost bitcoins. It’s the most scarce money we’ve ever had.

Decentralised

Money should not be in control of anyone, because people are corruptible. Whereas the collective consensus of everyone prevents it from being corrupted in a way that we all don’t want.

Immutable

When we send or receive money, we need to know that this money cannot be taken back at any giving time. Each transaction must be final and non-reversible. With bitcoin, once a transaction reaches 6 blocks deep within the blockchain, it is practically impossible for it to be reversed. Its transaction is final.

Verifiable

If a transaction has occured, we need a way for anyone to be able to verify that without the need for a third party. If we have a system that requires a third party to verify, then we now have a system that is in their control. They can lie to you, delay you, or simply not answer you. But with Bitcoin, every single detail can be verified within seconds on your own Node if you choose to, or you could ask everyone on the network to get the consensus of what they say.

Footnotes

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Further Reading

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