{"id":899,"date":"2020-02-13T07:06:25","date_gmt":"2020-02-13T07:06:25","guid":{"rendered":"https:\/\/timestampmag.com\/?p=899"},"modified":"2020-05-01T15:02:11","modified_gmt":"2020-05-01T15:02:11","slug":"the-bitcoin-philosophy","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2020\/02\/13\/the-bitcoin-philosophy\/","title":{"rendered":"The Bitcoin Philosophy"},"content":{"rendered":"\n<ul><li><strong>Bitcoin was created in 2009 by an anonymous person or group of persons under the pseudonym Satoshi Nakamoto<\/strong> <\/li><li><strong>The relative scarcity of Bitcoin is one of the underlying factors driving its value higher<\/strong> <\/li><li><strong>The Bitcoin philosophy (as well as that of other cryptocurrencies) is to solve most of the inherent challenges associated with the existing monetary system<\/strong> <\/li><\/ul>\n\n\n\n<p>Bitcoin was the first cryptocurrency to ever reach the mainstream. Cryptocurrencies are enigmatic, to say the least. Many people regard Bitcoin as a currency, while others see it as a risky asset. Even most government agencies have not reached consensus on how best to classify it. Part of the reason for this is the Bitcoin philosophy and what it means for the traditional financial markets. <\/p>\n\n\n\n<p>The Security and Exchange Commission (SEC) hasn\u2019t been able to properly classify it even though SEC <a href=\"https:\/\/coincenter.org\/link\/sec-chairman-clayton-bitcoin-is-not-a-security\" target=\"_blank\" rel=\"noopener\">had agreed Bitcoin isn\u2019t a security<\/a>. The <a href=\"https:\/\/www.npr.org\/sections\/thetwo-way\/2014\/03\/25\/294364892\/irs-says-it-will-treat-bitcoins-as-property-not-currency\" target=\"_blank\" rel=\"noopener\">IRS treats it as a property<\/a>, while the Commodity Futures Trading Commission (CFTC) <a href=\"https:\/\/www.coindesk.com\/bitcoin-as-a-commodity-what-the-cftcs-ruling-means\" target=\"_blank\" rel=\"noopener\">termed it a commodity<\/a> and traded it as one. However,&nbsp; one thing common to these propositions is that they all viewed it as an instrument that has an underlying value.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"> <strong>What Is Bitcoin?<\/strong> <\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/na8_WAXO1wvTk-3KGm4jrHi9yIUMwy-0wS_Fuc822M7Q-N6Bsy1B-XCbGXi7CgKoSKOcIXs2Amcqvx3DCkCk4Ekcrc7AFU6a3nFEjO_DqDURb_Y0fUY6ruldT3hVHWPyvhN4sVL4\" alt=\"\"\/><\/figure>\n\n\n\n<p><a href=\"https:\/\/bitcoin.org\/en\/\" target=\"_blank\" rel=\"noopener\">Bitcoin<\/a> is an innovative payment network and a new form of money. It is an <a href=\"https:\/\/www.investopedia.com\/terms\/e\/ecash.asp\" target=\"_blank\" rel=\"noopener\">electronic cash<\/a> system that can be sent from one user to another without the need for an intermediary or third party. Compare this to sending money to a friend using the services of a bank, where your bank serves as the third party between you and your beneficiary to complete the transaction.<\/p>\n\n\n\n<p>A cryptocurrency conveys two meanings: crypto and currency. Crypto implies the deployment of <a href=\"https:\/\/www.geeksforgeeks.org\/cryptography-and-its-types\/\" target=\"_blank\" rel=\"noopener\">cryptography<\/a> to secure the transaction on the Bitcoin network while currency implies it can serve as a medium of exchange.&nbsp;<\/p>\n\n\n\n<p>As Bitcoin is decentralized, it ensures that it&#8217;s not regulated by any central organization or government. This also implies that the currency is not minted or issued by anyone, but rather it is generated through a network of powerful computers \u2013 historically referred to as <a href=\"https:\/\/www.bitcoinmining.com\/\" target=\"_blank\" rel=\"noopener\">Bitcoin mining<\/a>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"> <strong>Brief History Of Bitcoin<\/strong> <\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/bVLIIjM3OdekyqyB8OscOPxmp16sD1CTkMezUp2Rzvwm7b7PU3MNMPoJLmYtqQm3o9QokY4HCsr57gN9g9bHYzDcfGKameBQtlpsS5fr1c8w_HN8yHIig2sXQvTpuy0P46S6zRjE\" alt=\"\"\/><\/figure>\n\n\n\n<p>Bitcoin was introduced in 2009 by an anonymous person or group of persons under the pseudonym, Satoshi Nakamoto. Satoshi has always been popular in the cryptography forums because of their regular contributions to the body of cryptographic knowledge.&nbsp; Since creating Bitcoin 11 years ago, Satoshi\u2019s real identity remains a mystery to-date to the general crypto community.&nbsp;<\/p>\n\n\n\n<p>The motion that fueled the creation of Bitcoin was connected to the idea of welcoming a new electronic cash system. This decentralized infrastructure is well-positioned to pave way for&nbsp;a far more transparent, efficient and low-cost payment ecosystem for the future.&nbsp;<\/p>\n\n\n\n<p>This system gets rid of middlemen and places the user in control, keeping transactions safe, secure and transparent. It ultimately eliminates the high fees charged by the traditional payment systems.<\/p>\n\n\n\n<p>Many people have linked the creation of Bitcoin as one that was inspired by the 2008 financial meltdown which brought the whole world to a halt. This wasn\u2019t a coincidence as it was of paramount importance at that time to issue a monetary system that was void of corruption and central control.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Since then Bitcoin has come a long way in a very short time. Its price started at 30 cents and soared to $30 in approximately six months. It reached an all-time high of $20k on the 17th of December, 2017. As at the time of writing this piece, the price keeps hovering around $10k. In retrospect, it has done pretty well in gearing up for mass adoption.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Unique Properties of Bitcoin and How They Relate to the Bitcoin Philosophy<\/strong> <\/h2>\n\n\n\n<p><strong>Bitcoin is decentralized: <\/strong>One of the aims of creating Bitcoin was to achieve a transparent system with distributed autonomous governance. In the Bitcoin mining network, no single miner can enforce a protocol change in the Bitcoin consensus network.&nbsp;<\/p>\n\n\n\n<p><strong>Bitcoin is anonymous: <\/strong>Traditional financial institutions keep track of their customers\u2019 information and determine how to manage their funds for them. This is altogether different for Bitcoin, as transactions are anonymously recorded in the Bitcoin\u2019s ledger without revealing any personal information about the parties involved.&nbsp;<\/p>\n\n\n\n<p><strong>Bitcoin is transparent: <\/strong>By design, if your Bitcoin ledger address has been widely used, anyone can see how much cash is in it by simply analyzing the blockchain record. This is a key part of the Bitcoin philosophy and makes it easy to verify the correctness of a transaction, check for fraud and reconcile a dispute between transacting parties.<\/p>\n\n\n\n<p><strong>Bitcoin transactions are immutable: <\/strong>When Bitcoin is sent to another party, the sender cannot reverse such a transaction. Reversing the transaction would actually involve the recipient initiating another transaction. This helps to prevent fraud as a sender cannot trick the network with a fake transaction, nor can the recipient claim not to have received the money when it has been fully paid.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Factors That Could Impact The Price Of Bitcoin<\/strong> <\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/OeImTJfwfI1POuyuAvrnz1vJmnw7oF6M2BBNEo2MdwkFJT4P2FTvhGKiCWOf7sZaqjH2muxr3bpVnSpZxUjCrbojzClsZYXSoELX0uzveYWbAuTdv6ob7rBKHYuwbeV2n0RpQ0h_\" alt=\"\"\/><\/figure>\n\n\n\n<p>The value of a Bitcoin on the other hand is determined by the forces of demand and supply, the same way the price of commodities is determined. Satoshi set up Bitcoin in such a way it was restricted to a maximum total supply of 21 million coins, which makes it relatively a scarce resource.&nbsp;<\/p>\n\n\n\n<p>Adoption rate, use cases and the way the government reacts to it could influence the price of a Bitcoin either positively or negatively. Just like the traditional financial markets, investors\u2019 sentiment is greatly influenced by these external factors.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What The Future Holds For Bitcoin<\/strong> <\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/eqkog9we-kWVVGLu3FV8E11WBrMx2Br9BQWxnRI4jZDzv_zGjJ1uUBbQ4IXddDLzhAxednQJDR30B5L6BBICui3ghIlT90SuBkbF11CVIUIz-LZSDYkQdK1u2oC9hm1_qoqZJu0-\" alt=\"bitcoin philosphy\"\/><\/figure>\n\n\n\n<p>Bitcoin has already set itself on a path towards mass adoption, it has been gaining mainstream acceptance since it came into existence. Owing to the uniqueness of Bitcoin and other cryptocurrencies, it won\u2019t take long for most governments to declare support and adopt a favorable cryptocurrency framework.&nbsp;<\/p>\n\n\n\n<p>Cryptocurrencies when fully adopted is poised to solve most of the inherent challenges associated with the existing traditional monetary systems. The Bitcoin network brings a lot of benefits for merchants and users: fast &amp; reliable transactions, low cost &amp; transparent payment systems etc.&nbsp;<\/p>\n\n\n\n<p>Fiat currency has so many pitfalls, one of which is the heavy devaluation of fiat currencies. Bitcoin and other cryptocurrencies could serve as a good replacement or can co-exist as an alternative digital currency that not only brings value to users but also hedge against hyperinflation.&nbsp;<\/p>\n\n\n\n<p>There&#8217;s no argument that this technology is here to stay. As Bitcoin positions itself for increased adoption things will look very different &#8211; presumably positive &#8211; in 5 to 10 years from now on.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin was created in 2009 by an anonymous person or group of persons under the pseudonym Satoshi Nakamoto The relative scarcity of Bitcoin is one of the underlying factors driving its value higher The Bitcoin philosophy (as well as that of other cryptocurrencies) is to solve most of the inherent challenges associated with the existing [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":900,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,13],"tags":[30,127,169,139,131],"_links":{"self":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/899"}],"collection":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/comments?post=899"}],"version-history":[{"count":1,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/899\/revisions"}],"predecessor-version":[{"id":2117,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/899\/revisions\/2117"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media\/900"}],"wp:attachment":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media?parent=899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/categories?post=899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/tags?post=899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}