E-Gold Before & Bitcoin Now / To Understand The Concept of Bitcoin / Cryptocurrency, You Should Understand The History That Led to it.

in #bitcoin7 years ago (edited)

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The last week I wrote about:

The Benefit of Using Cryptocurrency

A Look At Blockchain Technology

Where is The Bubble

For me was a big surprise that some of you did not know about it!
The reason why I come up with this post.

To better understand the concept of Bitcoin / Cryptocurrency you
should understand the history that led to it.

May be some of you did know about e-gold / gold backed currencies.
I started to use e-gold, 17 years ago until e-Gold was brought down.
After e-Gold was brought down, the US government stepped in and required that everyone who holds e-Gold exchange it immediately and then it was mandated that no one would be allowed to redeem it without going through a Federal Prosecutor.

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Bitcoin arose after the failure of gold backed currencies like E-Gold. The idea was to use a virtual currency, backed by the gold standard, and to trade this currency instead of the gold itself. It became extremely popular extremely fast and because of it’s ease of use it was targeted for use with criminal activity.

Other systems of gold backed currencies failed before governments could get involved because the companies behind them used the gold for their own investments rather than holding the gold, which came to light after those investments didn’t pay off. Basically, the problem was that a central point of control meant that any government can take it down, or charge fees that make it less reasonable to use, or be subject to internal corruption.

This is why when Bitcoin was first proposed in a paper by the person or group known only as "Satoshi" it would have a limit to the maximum number of coins produced simulating the gold standard. What makes gold valuable? Scarcity. Today Gold has uses, but when it was originally used to back currencies it’s only use was the scarcity. Since Bitcoin has scarcity, it can represent a gold standard.

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For security, Bitcoin uses a hashing algorithm that becomes increasingly complex which goes along with transaction verification. This gets used along with a ledger system so that it becomes impossible to spoof a transaction.

Every few years, this reward cuts in half, transitioning towards an environment where the miners are only paid in transaction fees alongside the expanded use of Bitcoin as a currency.

The fact that Bitcoin is decentralized means that governments cannot impose money transmitter fees on the network itself. There’s no one to charge and no one to take to court. They can only, charge fees to centralized exchanges.

Bitcoin is generally seen as a system of anonymous transactions, because you can create a wallet without any personal information, and can create as many as you want, but the public ledger means that the moment you buy or sell Bitcoin through any exchange that connects to a real bank account or a physical address your identity can be traced. This is why it proved to be far easier to convict drug cartels that used Bitcoin than any drug case in history.

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Such a valuable post about E-Gold and Bitcoin close up, start up history @lordoftruth. Lot of peoples use BTC market however don`t know when started bitcoin market. You shared those history clearly from this post. Thank you. Upvote

Very useful E-Gold Before & Bitcoin Now historical post you sharing sir.
It is best one because we don`t know bitcoin and E-gold history.
Bitcoin is doing anonymous transactions. No need to enter any personal information. This is a point. My opinion is Bitcoin is more than better E-gold.

Such a valuable post about E-Gold and Bitcoin close up, start up history @lordoftruth. Lot of peoples use BTC market however don`t know when started bitcoin market. You shared those history clearly from this post. Thank you. Upvote

Good post i am support for your every thing post good luck

@lordoftruth - Sir, I never heard about e-gold before.... And I understood Sir, decentralization is the key of success behind BitCoin... Love your review & wonderful article about why we hodl BTC Sir.... Therefore, I wish to ReSteem your post.

+W+ [UpVoted & ReSteemed]

Good educational piece!

Very nice post as always @lordoftruth ...upvoted...Bless

Great post, thanks for sharing this information 🙏🙏🙏

Very useful E-Gold Before & Bitcoin Now historical post you sharing sir.
It is best one because we don`t know bitcoin and E-gold history.
Bitcoin is doing anonymous transactions. No need to enter any personal information. This is a point. My opinion is Bitcoin is more than better E-gold.

Thanks for this explanation my friend ^^

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Many many thanks for upvote our comments. @lordoftruth you are a great man.i salute you boss.go ahead.we are with you all time.best of luck

That is amazing!!

@lordoftruth,
E-Gold I didn't aware about it before! I think China is going to announce their own Crypto coin based on centralized authority will be something like E-Gold! Personally I believe BTC is not a fully decentralized platform and there are a set of stupid miners and holders are crazy about money so, they endanger our investments by stupid forks! It's a very bad idea for BTC! BTC is a legend, but such dramas can kill the legend and it might open the doorway to Centralized, Authorized crypt platforms like China is trying to introduce!
Great article and thanks for sharing such great review with us!

Cheers~

It is indeed an informative post buddy got to know many new details
Thanks for the update
Resteemed

Now that was really interesting to understand thanks for sharing about it :) @lordoftruth

Thanx for throwing the light on e-gold and bitcoin history.

Very nicely written article .