Coins – Cryptocurrency and the Blockchain

Well, it’s 2018. And everybody is writing about Cryptocurrency and Bitcoin. So what the heck do we have to say? We should swear a little, cos that’s in with Crypto. Crypto is the loud noisy kid with the shiny jewelry and the purple Lamborghini, crashing the party on Banana Island (a high brow residential area in Lagos, Nigeria) with his new money while all the old money complains about how the real estate values have gone down since he moved in.

We will talk about 3 things.

• Hash power and how it is interlinked with intrinsic value
• Protocols and how it is linked to security
• Regulations and how it is linked to the price

When you read this, you will know three things.

• What the hell coins are, altcoins and the big daddy of them all (Bitcoin).
• What is the blockchain and how that makes sure you cant be hacked, and how everything else is a crapshoot.
• Why banks and central governments will try and kill cryptocurrency, and when they fail, they will co opt it.

We need a hero, his name is Satoshi Nakamoto, whether he be a man , a wannabe god, or a machine or a secret society we cannot tell. What I can tell you is, Satoshi Nakamoto has changed the world forever.

Satoshi invented bitcoin, he wrote the code and designed the protocol, he was genesis, he brought about the blockchain, if Bitcoin has a god it is him (or it), nobody knows who the fuck this guy is, his name is not Satoshi Nakamoto, he knew what he was doing was extremely dangerous, and would change the world , so he remained anonymous, nobody else figured that out until later.

He developed hashpower, which means every time a bitcoin is transferred or sold or used in a transaction, it is authenticated, this authentication is distributed and decentralized, you can sign up to authenticate, this is called mining,

ONLY miners create new bitcoin, its is a hugely processor power consuming process, and get this, as more bitcoin are created , the processing power required to solve the problems get higher, as the protocols become more complex.

This is important, stay with me, as of today 2/12/2018.. it takes around 5000 USD in electrical power to generate one bitcoin. This is the intrinsic power, this due to all the heat that must be dissipated and all the processing power that must be used to authenticate any ONE transaction.

This authenticated transaction is then put on a list, a public list, forever. This list is a distributed ledger, this list can be downloaded by anyone and every one and is updated in real time, this is the blockchain.

This is a lot of power.  This is a lot of polar icecaps melting (fuck you polar bear, muh bitcoin)

This is a lot of power, this REAL value, and it can only go up, bitcoin is selling for around 8k now (which is like 3k off its intrinsic value) sooooo… you get the idea.

As the computations get harder, you will need more power, and then. Bitcoin as written will get to a point and then, boom, no more bitcoin can be made.

Get that? It’s limited, it has intrinsic value, it will soon be scarce, it’s authenticated (for now) and it cannot be faked (cos of distributed ledger).

Altcoins

Now let’s go to altcoins, there are too many.. and it gets complex fast, some are centralized, some are private ledgers, some are basically fiat. If you are interested, we can look at Ethereum and Litecoin at a later date.

Blockchain is the big difference between an open, authenticated, distributed, decentralized coin like bitcoin and a wannabe like Ripple, which is just made up of code. We like Ripple but trick please, even the people that made Ripple don’t know what to do with Ripple. But Ripple is cool for one reason, it allows seamless money transfer globally, and this is the trick.

You can create an altcoin (altcoin is any coin apart from bitcoin) to do anything. It’s basically just an authentication token. This is important when Bitcoin, Ethereum, Litecoin, and Ripple dies. The authentication token will live forever,

Satoshi Nakamoto did not invent Bitcoin, he gave us freedom. We will get to this.

The Protocol

This authentication protocol is what makes Bitcoin unhackable (until quantum computing goes online and then your guess is as good as ours).

Just know that for now, there are coins that you buy, like bitcoin, as long as you store them pretty OK (in a normal exchange or in a cold storage wallet) they are like shares, they are yours, nobody is taking them away from you.

Except that they are code… so. Maybe one day, somebody with a BIG enough computer, but don’t be scared.

Why do governments hate Crypto?

This is a tool to overthrow governments, quote me on this… We repeat, this is a tool to overthrow governments, especially ones in which the people are tired of their schtick.

Imagine if Zimbabwe has an authentication token, or or or… name your country. make the central bank irrelevant. finis, the government is kaput. No more fiat currency, so of course countries would rather not let it survive.

This will take some time, people are still salivating over the making money part, that’s OK. Most people are poor, or have a poverty mentality.

Governments and central banks are understandably concerned (read, terrified if they have half a brain) and have slowly started reacting. Everything is fair game as long as it’s a financial application or transaction.

And if you don’t know , now you know.