I FINALLY READ THE BITCOIN WHITE PAPER AND HERE'S WHAT I GOT FROM IT

in #bitcoin3 years ago (edited)

I finally read the Bitcoin White paper AND here's what I got from it....

I must say it was a pleasant presentation. I placed myself in the shoes of a person in 2008 who was viewing this for the first time. Its' short and concise explanation of a algorithmic solution to a problem was remarkable. I was actually impressed with the way this idea was communicated. The idea was the blockchain. I have understood the concept for quite sometime now. However, I would at times scramble to communicate it's relevance and meaning. There were so many ways to philosophize the influence that the blockchain had brought to society. The Bitcoin Whitepaper proved to be the missing link in my full comprehension of it's importance to the world. The blockchain was formerly introduced to the world through Bitcoin. The Bitcoin whitepaper made little mention, if at all, of the term 'cryptocurrency' which has been familiarized in the financial and political sector for it's disruptive monetary sovereignty. The whitepaper referred to Bitcoin as a "peer to peer cash system" with a critical feature of third party absence. A deliberate act of separation from the governance of banks.

It continued to refer to a coin used between two consenting parties of a transaction. It also mentioned of a limited supply of the coin to act the way as a physical currency being traded in exchange for a good or service. This was the focus! However, the paper highlight a problem that would fundamentally render the system ineffective. The problem was called "double spending." Double spending was associated with duplicated money use to make a purchase. As a former Banker, I have corrected transactions from client accounts that were identically paid out more than once. The financial institution, as a third party, serviced double spending errors.

Another case for double spending was intentional- credit issuance through fractional reserve lending or central bank monetary policies. Although the limited coin supply addresses that particular problem, I recognized that as double spending which had usually caused debt and inflation. Now the solution was revealed for "double spending"- a network of computers used to verify transactions for a reward of the coin itself. The computer nodes were to engage in an act of "mining" to verify transactions, release new coins into circulation (from a capped supply), and receive a reward from their work by guessing a hash number. Everything governed by the Bitcoin protocol. The power of Proof of Work to build a democratic decentralized system to prevent the "double spending" problem.

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