Understanding Bitcoin for Beginners

/I want to start my journey here by sharing whatever little knowledge i have with a mini series of blog posts for people to understand Bitcoin and blockchain from scratch. How it came to be, how it works under the hood and how it can be one of the most revolutionizing technologies uniting the entire world for the first time ever.

LinkedIn: https://www.linkedin.com/in/chirag-popat/

feel free to get in touch with me :D \

\1/ Events leading up to the dawn of decentralization

Belonging from a financial background, I have always read about the importance of diversification and how it is one of the most powerful tools we can use to insulate ourselves from market uncertainties. How our portfolios should contain a basket of asset classes like stocks, bonds, real estates, commodities, and the likes, as well as diversification within each asset class as well. But i always think about the concentration caused due to globalization and more importantly our reliance on the US dollar as a means of trade and international transactions. We are highly concentrated in the USD which amplifies the contagion effect of a financial crisis in any country.  

                               The value of any currency is just a shared myth which we all believe in.      

 We believe that some government in some country which has promised its citizens to pay the equivalent sum of the "special" paper, will uphold that promise and we all feel safe and secure until something goes wrong. What we fail to realize is that all of us are living in a social experiment, an experiment of "fiat currencies" and "democracy". We need to keep in mind that experiments may very well fail, which it has numerous times in the past.

Let me remind you of a few...

1920s

• Depression of 1920-21, a U.S. economic recession following the end of WW1
• Wall Street Crash of 1929 and Great Depression (1929–1939) the worst depression of modern history

1970s

• 1970s energy crisis
  • OPEC oil price shock (1973)
  • 1979 energy crisis (1979)
• Secondary banking crisis of 1973–1975 in the UK
• Latin American debt crisis (late 1970s, early 1980s) known as "lost decade"

1980s

• Japanese asset price bubble (1986–1992)
• Black Monday (1987) (1987) (US)
• Savings and loan crisis failure of 1,043 out of the 3,234 S&Ls from 1986 to 1995 in the U.S.

1990s

• Early 1990s Recession
• 1991 India economic crisis
• Finnish banking crisis (1990s) (1991-1993)
• Swedish banking crisis (1990s)
• 1994 economic crisis in Mexico
• 1997 Asian financial crisis
• 1998 Russian financial crisis
• 1998-99 Ecuador financial crisis
• Argentine economic crisis (1999–2002)
• Samba effect (1999) (Brazil)

21st century

2000s

• Early 2000s recession
  • Dot-com bubble (2000-2002) (US)
• 2001 Turkish economic crisis
• 2002 Uruguay banking crisis
• Venezuelan general strike of 2002–03
• 2007-2009 Financial Crisis
• Late-2000s recession (worldwide)
  • 2000s energy crisis (2003-2009) oil price bubble
  • Subprime mortgage crisis (US)(2007-2010)
  • United States housing bubble and United States housing market correction (US)(2003-2011)
  • Automotive industry crisis of 2008–2010 (US)
  • 2008–2012 Icelandic financial crisis
  • 2008–2010 Irish banking crisis
  • Russian financial crisis of 2008–2009
  • 2008 Latvian financial crisis
  • Venezuelan banking crisis of 2009–10

This is just the last century. There have been countless before and if we keep going in the same direction, there will be countless more. It all boils down to the same things over and over again, a lack of political and corporate transparency, a blind lust for power, information asymmetry and excessive inflation due to unchecked currency printing. 

We cannot possibly keep believing that a system which has created such disastrous events in almost every country of the world can possibly be sustained and help our species evolve. People suffer and are left helpless and powerless every time such an event takes place. The bubble of patience has been growing and more and more people are becoming aware and are looking for an answer, a way to get the power back into our own hands, to not feel helpless anymore.

 A change was long overdue. A way to protect OUR hard earned money. Protect it from inflation and corruption with the added advantage of privacy, transparency and no limits on being time bound to conduct transactions. This is not something we need to wait for in the distant future anymore. We already possess this power...

I love a saying by Andreas Antonopoulos, and please forgive me because i am paraphrasing here, "Like Prometheus who stole fire from the Gods and gave it to man, Satoshi Nakamoto stole the power of money from the Governments and gave it to the people". 

Who is Satoshi Nakamoto? What was his gift ?...