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What Does Bitcoin Look Like?

Oleg Andreev, software designer and security developer, at an article Which he published on his personal blog, Bitcoin Has compared with different assets, technologies and economic and social phenomena and examined their differences and similarities. 

In his article, Andrew first outlines the similarities and then the differences between Bitcoin and each of those phenomena. To read this article, stay tuned to Digital Currency.


What does Bitcoin look like?

Bitcoin is like cash. Its transaction is non-refundable and you are fully responsible for it. If you lose or forget your wallet private key, you will lose your property. You can give someone a bitcoin to keep it for you, but like a bank you have to trust these people and make sure they do not run away with your money.

Bitcoin is not like cash . You can store as many bitcoins as you want and they will not take up any space unlike physical cash. You can send it to anyone via wired or radio communication. Its counterfeiting is impossible. The transaction will not be done in one second, you have to wait 10 to 15 minutes for the encryption to be confirmed by the network and you can be absolutely sure that the transaction has been done. However, sometimes you can send transactions with a fee of close to zero to the network. The risk of cancellation of these transactions is relatively low.


What does Bitcoin look like?

Bitcoin is like gold. Bitcoin is not produced by itself and there is a limited amount of it. This value is scattered in four dimensions of space-time (three dimensions related to space and one dimension related to time) and, of course, more in time. To get bitcoins, someone has to give them to you or extract them. Bitcoin is as brilliant as gold, not physically, but technologically: eye-catching engineering, wise motivation, contract programming language, freedom of choice, and freedom from coercion are the features that make Bitcoin brilliant, and It attracts people.

Bitcoin is not like gold. The supply of new bitcoins through the extraction process is well defined and planned (only a certain number of bitcoins are generated per hour). So, you can be sure that no one will suddenly find a mountain of bitcoin or extract it on other planets. For example, the asteroid “16 Psyche”, which orbits between Mars and Jupiter, has such a large amount of gold that if we divide its gold at the current price per ounce among the people of the world, about 100 billion dollars of gold per person will reach and This means the overnight destruction of the world economy. But you can not find any planet where a lot of bitcoins are stored!

What does Bitcoin look like?
Asteroid 16 Psyche; Potential threat to gold scarcity

Unlike gold, bitcoin mining is clearly programmed. If the miners’ efforts to extract bitcoins increase, the network hardness will be readjusted and the extraction process will become more difficult. On paper it is possible to extract all the gold available in one day; But in the case of Bitcoin, even if you use the most powerful computers in the world, you can not do it.


What does Bitcoin look like?

Bitcoin is like a bank. In Bitcoin, like banks, we deal with computers, databases, and transactions. The database stores the history of all incoming and outgoing payments; That is, who sends how much property to whom. Everything here is digital. There is no treasury room for storing gold and safes, only some data is kept in a “general ledger”. This is the structural similarity of Bitcoin to the bank.

Bitcoin is not like a bank. In Bitcoin, anyone can verify the authenticity of the general ledger. There is no responsible manager to update the head office and ensure that it does not interfere. Each person can have multiple accounts and all of these accounts are anonymous (unless someone wants to reveal their identity).

 Bitcoin Distributed General ledger does not store emails, all that is stored in this general ledger is the address and inventory of each address. The bank can lend more than the amount of money it has, but it is possible.Deficit reserve bankingIt does not exist in Bitcoin. 

Deficit reserve banking is a type of banking in which bank reserve is the only fraction of all customer balance. In fact, there is no debt in the Bitcoin general ledger. You either have money in your address and it completely belongs to you or you do not have money in that address and you can never use it! Bitcoin also allows you to lock your money through contracts; Cryptographic puzzles are designed to share decisions between several people or to generalize them over time.

Monopoly game money

What does Bitcoin look like?

Bitcoin is similar to the currency in the monopoly game. AsGame Monopoly, Bitcoins are intangible chips that have no value and people value them because they can be used in the game. The same is true of gold and any other currency.

Bitcoin is not like monopoly money. The difference between bitcoins and monopoly tokens is that the number of bitcoins is limited and no one can counterfeit them. For this reason, it is a good candidate to replace world-famous collectibles such as silver and gold coins and has the ability to store value.


What does Bitcoin look like?

Bitcoin is like a gate. Git is software for controlling and protecting open source versions of software and a tool for programmers and developers to store, manage, edit, or share their work. At the gate, all developer changes are organized as a chain and protected by hashing. If the last correct Rest assured, you can get and verify all previous information from any source to make sure this is what you expected.

 Likewise, in Bitcoin, all transactions are in the same chainBlockchainAre organized. Once a block has been validated, by trusting its hash, you can trust the hash of all previous blocks and the information contained in them. In this case, distributed storage becomes possible and the process of checking the accuracy of the subject becomes easier.

Bitcoin is not like a gate. Despite the very close function of Bitcoin and Gate in the annotation of stored information, there are two differences. In the bitcoin system, everyone tries to work on a chain. But at the gate, everyone can have multiple branches and separate and reassemble them throughout the day. You cannot combine separate branches in Bitcoin. Blockchain is actually a transaction record tree; But there is always a large branch that is valuable, and small sub-branches (which never last more than one or two blocks) have no value at all. At the gate, content matters, not categories; While in Bitcoin, consensus on the core is more important than the content.


What does Bitcoin look like?

Bitcoin is similar to bitcoin.BitTorrent is a platform for file sharing and decentralization of large volumes of information. Using BitTorrent, users can interact with each other and send or receive the files they want. BitTorrent is a completely decentralized network, there are no banks or servers to store information centrally. Bitcoin blockchain is like a bitcoin torrent file; That is, it is fully encrypted and shared on a large number of computers. 

All participants in the network, including miners, act on an equal footing. If one part of the network is disrupted, the flow of transactions can continue through other parts of the network. Even if the entire network fails, transaction information is stored on thousands of standalone computers and no one’s money is lost. When miners reconnect, transactions resume; As if nothing had happened. Both Bitcoin and BitTorrent can survive a nuclear war; Because the information is not damaged by radioactive radiation and can be easily reproduced.

Bitcoin is not like BitTorrent. They have two major differences. There are many different files in BitTorrent; But in Bitcoin, instead of many files, there is a single file that is always getting bigger; This file is called Blockchain. Also, the most important participants in the Bitcoin network, the miners, receive rewards and rewards for their participation in the network. But BitTorrent contributors do not have such an advantage.

Freedom of expression

What does Bitcoin look like?

Bitcoin is like freedom of expression. Each transaction is a public text message that can be expressed regardless of where or how it is. If some miners receive this message, they will add it to the China block and this message will go down in history forever. Everyone will see it and no one will be able to clear it. So bitcoin is very similar to the phenomenon of freedom of expression.

Bitcoin is not like freedom of expression . It costs money to say anything. To transfer a coin in a transaction, you must first have that coin. Therefore, anyone who does not have a coin is not allowed to do the transaction, and only those who are qualified and can get some coins first have the right. Miners may also reject unpaid or spammy transactions. So no one works for anyone for free; But everyone tries to work together voluntarily. From this point of view, bitcoin is contrary to freedom of expression.