BME Rule #2: Medium of Exchange
Now that the world has the BME, everyone agrees it’s value is worth exchanging for stuff.
- Ever try to make a wire transfer? IT SUCKS!!!
- Today’s financial system is controlled by large institutions and governments, acting as middle-men, who make it really hard to digitally send money anywhere, for anything. It’s outdated and broken.
- Today, people don’t really own their money. The bank takes custody of your funds and promises you access to those funds, as they simultaneously lend your money to strangers who may or may not pay it back, and so the bank just types a number in your account (credit) in place of the money that’s supposedly yours to spend…if they let you…
Solution: Bitcoin is “Super-Cash”
Peer-to-Peer Electronic Cash (P2P)
- Bitcoin is a Digital Bearer instrument. It is the ultimate form of cash, meaning it is something meaningful in and of itself.
- Actually owning and holding money is part of what gives it value; the fact that it’s yours, and no one else’s. For the first time ever, Bitcoin gives people absolute, independent ownership of their property
- Bitcoin works like emailing a photo, but the sender doesn’t keep a copy. When you send someone Bitcoin from your digital wallet, it goes directly to their digital wallet
- Bitcoin’s fully distributed, peer-to-peer network also means that if someone tries to stop your transaction, they fail unless every one else reaches consensus and says it’s ok (which would never happen. Basically impossible)
- It’s simply a Better Option. Bitcoin enables a cheap, efficient, and secure alternative to the legacy rails of today’s financial infrastructure. Banks and companies like PayPal charge you to send and receive YOUR money. Bitcoin replaces those 2.5% “transaction fees” by fractions of that cost, and enables final settlement almost immediately.
- just like cash (physical dollar bill/coin), you can exchange it digitally, person to person, because it’s permission-less. Anyone can use Bitcoin whenever, wherever, and however they want
- That said, every transaction is pretty much “off the books and under the table” to an extent. You don’t need an ID, passport, or bank account to earn, spend or receive bitcoin. It’s your money. Use it when you need it!
- Bitcoin can only be used by the owner (YOU!) of the cryptographic private key (or your secret password) which controls the funds. Basically, cryptography keeps your money safe so only you can spend it
- Bitcoin doesn’t reveal anything about you when you use it. Someone could see the public key address (or destination) behind the payment, but nobody knows it’s you.
- Your money is exclusive to you and only you, because you have the secret password to use that digital gold any way you wish. It’s truly yours and no one else’s
- This pseudonymous nature (again, thanks to cryptography) gives people privacy, autonomy, and certainty in their transactions. Just think of it like tipping your bartender with a $20 bill, *but in super-secret-ninja mode
- With Bitcoin, you can opt-out of the broken financial system (which btw tracks all your financial activity) whenever you want
- Bitcoin is a distributed network where nobody controls it, making it the first and only, truly decentralized, digital currency. There is NO single point of failure in Bitcoin.
- Just like the internet, instead of being in one specific place, Bitcoin spreads across a network of nodes (or computers running Bitcoin’s software) that talk to each other all around the world. You even have the option to run your own node. Think of it like setting up your home router, but it’s also your bank that lets you automatically route payments and audit the economy’s money supply 24/7
- Payments are processed by miners (special computers in a global competition of finding new bitcoins) and broadcasted openly and publicly on the blockchain, a distributed public ledger/database: AKA Time Chain. Think of it as a hybrid of a public bank statement, and a calendar.
- The Time Chain keeps track of who holds what Bitcoin and records the transfer of funds from one address to another (shoutout Peer-to-Peer).
- Btw, you get to keep your own copy of the Time-Chain. So if bitcoin ever did crash, you got your own backup to fire up and pick up where you left off. You can literally kick-start/reboot the entire world economy from your bedroom…