What makes a Bitcoin valuable? What is a blockchain?
Hey Cryptonauts! Thanks for joining me.
Today we are going to be talking about what gives a Bitcoin it’s value. Why is everyone going crazy over these virtual 1’s and 0’s?? As a newcomer to the space it can be a little bit difficult to see how something like a Bitcoin, Litecoin, or an Ether could be “worth” anything.
I think it’s important we take a look at the underlying network that Bitcoin runs on. It’s a very special kind of network called a Blockchain. A blockchain is a massive computer network that keeps its important data in a decentralized location instead of a centralized one. Think of it like this; instead of your transaction going through a central location like Visa, or Mastercard, when you use Bitcoin the transaction is broadcast to the entire network at once. What’s cool about this is as the transactions are verified by the miners of the network, the blocks fill up and become a "chain". Hence, blockchain. If you were to go back and change any one single portion of the chain, you would thereby affect the ENTIRE CHAIN. This is what gives a blockchain it’s value -you cannot change or alter information in a block once it’s been added to the chain (without spending an INSANE amount of money to overpower or 51% attack the entire network). And in the case of Bitcoin you can’t hack the blockchain.
Okay that all sounds great n stuff but what does it mean?
Never have we had digital information like this before and it has some far-reaching implications for all aspects of society, and industry.
Essentially, a Bitcoin is a group of specially arranged 1,s and 0’s that is so unique it may be the only one that exists like that anywhere in the universe. A digital Picasso if you will.
Okay. Imagine this. Remember the creation of TCP/IP? TCP/IP is the very protocol that is the foundation for the internet as we know it. When TCP/IP was created do you think anyone could have envisioned it being capable of transferring 4K UHD video at gigabit connection speeds? No one would have ever imagined we would be streaming Netflix to our phones, because at the time it took 15-20 minutes to download a single webpage or an image!
But layers were built on top of the TCP/IP protocol,
And over time the new API’s and protocols we able to handle the internet we all know and love today.
Bitcoin today is the TCP/IP protocol in the 90’s. And that’s where we need to start thinking differently about these cryptocurrencies. Bitcoin and Ethereum are PROTOCOLS, not currencies (yet). They can serve different functions and one of them happens to be store of value, and maybe one day in the not too distant future we will use them as currencies in every day society. But for that to happen we need those layers built on top of the Bitcoin protocol so its scale able, usable, faster and has less transaction fees. It’s coming. You just have to wait. In the meantime, the price of Bitcoin will be volatile, but it will only continue to grow over time until one day it stabilizes around $500,000 to 1 million dollars PER BTC.
Listen I know how that sounds but it’s not that unrealistic. Could you imagine if the TCP/IP protocol was built on a blockchain, had a TCP token and served as a store of value? How much would the TCP token be worth today?? Think about it. We are literally at the very beginning folks. Bitcoin and especially blockchain tech is here to stay and it isn’t going anywhere. It’s going to revolutionize the way we all live our lives! By 2025, I don’t see us using “regular” money anymore. Hold onto your hats! All right, thanks listening and if you have any questions about cryptocurrency please feel free to leave a comment or send me a message. I will try and get back to each and every one of you. Keep learning, and remember STAY CRYPTIC !