Why is bitcoin so important?
Editor’s Note: Mark Andreessen, a venture capital firm, Andreessen Horowitz, has invested just under $ 50 million in Bitcoin-related startups. The company is actively looking for other objects for investment, working with Bitcoin, but Mark himself owns only the minimum amount of cryptocurrency.
The mysterious new technology appeared, seemingly out of nowhere, but in fact it was the result of two decades of intensive research and development of almost anonymous enthusiasts.
For political idealists, it became a type of liberation and revolution; the elite treats it with contempt and skepticism.
On the other hand, technology - botany - just amazed at it. They see great potential and spend their nights and weekends figuring out about it.
')
Then the main goods, companies and industries begin to enter it into commercial circulation; the consequences become serious; after that, many people wonder why her great prospects were not so obvious from the very beginning.
What technology am I talking about? Personal computers in 1975, the Internet in 1993, and - I think - Bitcoin in 2014.
One can hardly say that little is written about Bitcoin now, but the gap between the views of the press and ordinary people about what Bitcoin is already exists, and, according to a huge number of technologists, it remains huge. In this article I will explain why Bitcoin so aroused programmers and entrepreneurs from Silicon Valley, and that, in my opinion, is waiting for him in the future.
First, at the fundamental level, Bitcoin is a breakthrough in the field of computer science - those that rely on 20 years of research into cryptographic currencies and 40 years of experience in the field of cryptography by thousands of researchers around the world.
Bitcoin is the first practical solution to a long-standing computer problem called “The Task of the Byzantine Generals”. Quote from the original article telling about this problem: “[Imagine] that a group of generals of the Byzantine army set up camp with their troops around the enemy city. Communication is carried out only with the help of a courier, the generals must agree on a common battle plan. However, one or more of them may be traitors who will try to confuse others. The task is to find an algorithm by which all loyal generals can reach an agreement. ”
More generally, the task of the Byzantine generals raises the question of how to establish trust between parties connected only via the Internet, which cannot be trusted.
The practical consequence of solving this problem is that for the first time Bitcoin gives one Internet user the opportunity to transfer unique digital property to another Internet user, while the transfer is guaranteed to be safe and reliable, everyone knows that it took place and no one can challenge its legitimacy. The consequences of this breakthrough are hard to overestimate.
What types of digital property can be transferred in this way? For example, digital signatures, digital contracts, digital keys (for physical or online locks), digital ownership of physical assets, such as cars and houses, digital stocks and bonds ... and digital money.
All this can be exchanged through a reliable distributed network that does not require or rely on a centralized intermediary, like a bank or broker. In general, only the asset owner can send it, only the intended recipient can receive it, the asset can exist only in one place at one time, everyone can check the transaction and ownership of the assets at any time.
Bitcoin is an Internet ledger. You get into the book if you buy one of a fixed number of lines, in cash or selling a product and service for bitcoins. Your data is removed from it if you transfer the bitcoins to someone else who wants to make a purchase. Anyone on the planet can trade using this book - without any confirmation, without or with a very low commission. In Bitcoin, "coins" are just lines in a book, somewhat similar to places on the stock exchange, except that they are much more widely applicable to real transactions.
The Bitcoin ledger is a new type of payment system. Anyone can pay any other amount of bitcoins to another simply by transferring ownership of the corresponding line in the book. Specify the number, pass, the recipient will receive the same amount without authorization and most often without a commission.
The last part is of great importance. Bitcoin is the first major payment system in which transactions are made without or with very low commissions (up to a fraction of a cent). Existing payment systems charge a fee of about 2-3 percent - and this is in the developed countries of the world. In many other countries there are simply no modern payment systems or commissions are much higher. We will come back to this.
Bitcoin is a digital bearer document. This is a way to exchange money or assets between parties that still do not trust each other: a set of numbers is sent via email or, in extreme cases, via SMS. The sender should not know or trust the recipient or vice versa. Accordingly, there are no chargebacks - just like cash - if you have money or property, you can pay them, if not, you can't. This is something completely new. Something that has never existed before in digital form.
Bitcoin is a digital currency, the cost of which is based directly on two things: the use of the payment system today - the volume and speed of payments passing through the ledger - and speculation about the use of the payment system in the future. This is what confuses people. This is not to say that Bitcoin has an arbitrary value on the basis of which people trade; rather, people can trade using Bitcoin (everywhere, without fraud and without or with a very low commission), and as a result it has a cost.
Perhaps it would be correct to say that now the cost of Bitcoin is based more on speculation than on the actual amount of payments, and it is equally true that these speculations set such a high price for a currency that it has become almost impossible to make payments. Bitcoin must be worth something before it can make a certain amount of real payment volumes. This is the classic “chicken and egg” problem with respect to new technologies: such technology is worth nothing until it costs a lot. And therefore, the fact that Bitcoin has partly risen in price due to speculation brings closer the possibility of its actual use much faster than the absence of these very speculations.
Critics of Bitcoin indicate limited use of currency by ordinary consumers and sellers, but the same criticism was expressed against PCs and the Internet at the same stage. Every day, more and more consumers and sellers around the world buy, use and sell bitcoins. Their total number is still small, but it is growing rapidly. Ease of use for participants is also growing, as Bitcoin tools and technologies are improved. Remember, just surfing the Internet was also technically difficult. Now it is not.
Arguments that sellers will not accept Bitcoin due to its volatility are also incorrect. Bitcoin itself can be used as a payment system; sellers do not need to store bitcoins or be exposed to their volatility. Any consumer or seller can at any time sell and buy bitcoins and other currencies.
Why does the seller — whether on the Internet or the real world — want to accept Bitcoin as payment, given the small number of consumers who want to pay in this way? My partner, Chris Dixon, recently gave this example:
“Let's say you sell electronics online. Net profit in this area, as a rule, does not even reach 5 percent, which means that the usual commission of 2.5 percent takes half the profit. This is money that can be reinvested in a business, transferred back to consumers, or paid taxes on them. Of all these options, transferring 2.5 percent to banks for transmitting bits over the Internet is the worst. Another problem sellers face is international payments. If you want to know why your favorite product or service is not available in your country, then most often it’s about payments. ”
In addition, vendors are very attracted to Bitcoin, because it eliminates the risk of credit card fraud. This is a form of fraud that motivates so many criminals to work hard to steal customers' personal information and credit card numbers.
Since Bitcoin is a digital bearer document, the payee will not receive any information from the sender that can be used to steal the sender's money in the future by the seller or the criminal who steals this information from the seller.
Credit card fraud so worries sellers, credit card manufacturers and banks that online fraud detection systems are ready to literally stop a transaction that looks at least a little suspicious, regardless of whether it is honest or not. As a result, many online merchants are forced to refuse 5-10 percent of incoming orders, which could be easily completed if customers paid using Bitcoin, where such fraud is impossible. And since these orders were sent for payment, they represent the highest possible profit for the seller, so the ability to process them will dramatically increase profits for many.
This resilience of Bitcoin to fraud goes even into the physical world of retail stores and customers.
For example, with a Bitcoin, a recent attack that stole credit card information from 70 million customers of the Target department store network would have been impossible. Here's how it works:
You fill your cart and go to the checkout, as now. But instead of giving away your credit card to pay, you pull out your smartphone and take a snapshot of the QR code displayed on the cash register. The QR code contains all the information necessary to send Bitcoin to the Target supermarket, including the amount. You click "Confirm", and the transaction (including the conversion of dollars in your account to Bitcoin, if you do not have the Bitcoins themselves) passes.
Target is happy because he received money in the form of Bitcoin, which, if desired, can be immediately converted into dollars, and did not pay any or paid a very small commission; you are happy because hackers cannot steal your personal information; only organized crime is unhappy. (Well, maybe criminals are still happy: they may try to steal money directly from poorly protected computer systems. But even if they succeed, consumers are not at risk of loss, fraud or identity theft).
Finally, I would like to respond to the statement made by some critics that Bitcoin is a haven for black cases, criminals and terrorists who can transfer money anonymously and with impunity. This is a myth, caused mainly by an excessively vigorous description in the press and an incomplete understanding of technology. Like an easy-to-track email, Bitcoin is pseudo-anonymous, not completely anonymous. In addition, every transaction in the Bitcoin network is permanently recorded in a chain of Bitcoin blocks or a journal accessible to everyone. As a result, it is much easier for law enforcement to track Bitcoin than cash, gold or diamonds.
Bitcoin is a classic example of a network effect, a positive feedback loop. The more people using Bitcoin, the more valuable it will be for everyone who uses it, and the higher the next user will be an incentive to start using this technology. Bitcoin shares this effect with phones, the Internet and popular Internet services, such as eBay and Facebook.
In fact, Bitcoin gets a quadrilateral network effect. Four groups of people are involved in expanding the value of Bitcoin through their own participation, namely: (1) consumers who pay using Bitcoin, (2) sellers who accept Bitcoin, (3) "miners" who manage computers, process and check all operations and ensure the existence of a reliable distributed network, and (4) developers and entrepreneurs who create new products and services with Bitcoin.
All four participants of the network effect play an important role in expanding the value of the system as a whole, but the fourth is especially important.
In Silicon Valley and around the world, thousands of programmers use Bitcoin as the basis for a huge number of new products and services that were impossible before. And in our venture company, Andreessen Horowitz, we see a rapidly growing number of outstanding entrepreneurs (many of them have a reputable financial record) who build their companies on the basis of Bitcoin.
For this reason alone, Bitcoin rivals have a hard time. If something can push out Bitcoin now, then it should be much better, and everything should happen quickly. Otherwise, this network effect will provide Bitcoin dominance.
One obvious and huge area of application for Bitcoin-based innovation is international money transfer. Every day, hundreds of millions of low-income people work in harsh conditions abroad to earn money that could be sent back to their families in their homeland — over $ 400 billion annually, according to the World Bank. Every day, banks and payment companies charge crazy fees, up to 10 percent or even higher, to send this money.
Translation of these transactions to Bitcoin, which implies the absence or low commission, will provide a significant improvement in the quality of life of migrant workers and members of their families. It is hard to come up with something else with a faster and more positive effect for so many people in the poorest countries of the world.
In addition, Bitcoin can be a powerful force that will attract a much larger number of people all over the world to the modern economic system. Only about 20 countries around the world have fully modern banking and payment systems, and the remaining 175 still have a long way to go. Therefore, people in many countries are deprived of the products and services that we in the West take for granted. Even Netflix, a fully virtual service, is only available in 40 countries. Bitcoin, as a global payment system that anyone can use, can be a powerful catalyst for extending the benefits of a modern economic system to virtually the entire population of the planet.
Even here, in the United States, there is a long-recognized problem, which lies in extremely high commissions, which “non-bank” (that is, without ordinary bank accounts) people have to pay even for basic financial services. Bitcoin can be used to solve this problem, because people outside the traditional financial system will be offered services with an extremely low commission.
The third fascinating use of Bitcoin is micropayments or ultra-low payments. Micropayments were never possible, despite 20 years of attempts, because they are unprofitable to carry out (meaning $ 1 and below, up to cents or fractions of cents) through existing credit / debit and banking systems. The payment structure of these systems makes such payments unviable.
And suddenly, with Bitcoin, everything becomes very simple. Bitcoins have an elegant property of infinite divisibility: now up to eight decimal places, but in the future even more. Thus, you can specify an arbitrarily small amount of money, up to a thousandth of a cent, and send it anywhere in the world for free or almost free.
Think, for example, about content monetization. The reason why mass media enterprises, such as newspapers, are forced to charge for content, lies in the fact that they have to ask for money for everything at once (pay the price for all content) or not to ask at all (which we owe to terrible banners in Internet). Bitcoin makes economically viable payment of arbitrarily small amounts of money for an article, section or hour of use, video or access to the archive, for notification of news.
Another potential use of Bitcoin micropayments is combating spam. Future email systems and social networks may refuse to accept incoming messages if they are not accompanied by a tiny amount of bitcoins - small enough not to matter to the sender, but large enough to prevent spammers who today can send billions of spam for free and with impunity posts.
Finally, the fourth interesting area of use is public payments. I first read about this idea in an article a few months ago. During a sports broadcast, a casual viewer stood with a poster with a QR code on which was written “Send me bitcoins!” He received $ 25,000 in bitcoins in the first 24 hours, all from people he had never met before. It was the first case in history when you saw someone with a sign, in person, on TV or in a photo, and then you could send him money in two clicks on a smartphone: remove the QR code on the sign and confirm sending money.
Think of the implications for protest movements. Today, protesters want to get on television, so that people learn about their motivation. Tomorrow they will want to go there, because this is how they will be able to collect money, simply holding in their hands the signs that will allow sympathetic people anywhere in the world to send them money right away. Bitcoin is the embodiment of the dream of financial technology, even the most hardened anti-capitalist politicians.
In the coming years we will have a lot of noise around this new technology.
For example, some prominent economists are quite skeptical about Bitcoin, although Ben S. Bernanke, the former Federal Reserve chairman, recently wrote that digital currencies, such as Bitcoin, “can last long enough, especially if they contribute to faster, safer and more efficient carrying out payments. " In 1999, the legendary economist Milton Friedman said: “One thing that we lack, but which will soon be developed, is reliable electronic money, a method by which it will be possible to transfer funds from A to B on the Internet, even if A and B strangers is a method by which I can take 20 dollars and pass them on to you, and you will get them without even knowing who I am. ”
Economists who attack Bitcoin might be right today, but I agree with Ben and Milton.
In addition, there is no need to harmonize regulatory and other issues, as the regulatory framework governing banks and payments in countries around the world did not expect the emergence of such technology as Bitcoin.
I hope I showed you how big the future is for Bitcoin. This is no ordinary libertarian fairy tale or Silicon Valley bubble. Bitcoin offers a radical opportunity to rethink how the financial system can and should work in the Internet era, as a catalyst for changes that will be equally useful for ordinary people and companies.
Article translated specifically for the corporate blog Host-tracker.com - service monitoring site performance.
The mysterious new technology appeared, seemingly out of nowhere, but in fact it was the result of two decades of intensive research and development of almost anonymous enthusiasts.
For political idealists, it became a type of liberation and revolution; the elite treats it with contempt and skepticism.
On the other hand, technology - botany - just amazed at it. They see great potential and spend their nights and weekends figuring out about it.
')
Then the main goods, companies and industries begin to enter it into commercial circulation; the consequences become serious; after that, many people wonder why her great prospects were not so obvious from the very beginning.
What technology am I talking about? Personal computers in 1975, the Internet in 1993, and - I think - Bitcoin in 2014.
One can hardly say that little is written about Bitcoin now, but the gap between the views of the press and ordinary people about what Bitcoin is already exists, and, according to a huge number of technologists, it remains huge. In this article I will explain why Bitcoin so aroused programmers and entrepreneurs from Silicon Valley, and that, in my opinion, is waiting for him in the future.
First, at the fundamental level, Bitcoin is a breakthrough in the field of computer science - those that rely on 20 years of research into cryptographic currencies and 40 years of experience in the field of cryptography by thousands of researchers around the world.
Bitcoin is the first practical solution to a long-standing computer problem called “The Task of the Byzantine Generals”. Quote from the original article telling about this problem: “[Imagine] that a group of generals of the Byzantine army set up camp with their troops around the enemy city. Communication is carried out only with the help of a courier, the generals must agree on a common battle plan. However, one or more of them may be traitors who will try to confuse others. The task is to find an algorithm by which all loyal generals can reach an agreement. ”
More generally, the task of the Byzantine generals raises the question of how to establish trust between parties connected only via the Internet, which cannot be trusted.
The practical consequence of solving this problem is that for the first time Bitcoin gives one Internet user the opportunity to transfer unique digital property to another Internet user, while the transfer is guaranteed to be safe and reliable, everyone knows that it took place and no one can challenge its legitimacy. The consequences of this breakthrough are hard to overestimate.
What types of digital property can be transferred in this way? For example, digital signatures, digital contracts, digital keys (for physical or online locks), digital ownership of physical assets, such as cars and houses, digital stocks and bonds ... and digital money.
All this can be exchanged through a reliable distributed network that does not require or rely on a centralized intermediary, like a bank or broker. In general, only the asset owner can send it, only the intended recipient can receive it, the asset can exist only in one place at one time, everyone can check the transaction and ownership of the assets at any time.
How it works?
Bitcoin is an Internet ledger. You get into the book if you buy one of a fixed number of lines, in cash or selling a product and service for bitcoins. Your data is removed from it if you transfer the bitcoins to someone else who wants to make a purchase. Anyone on the planet can trade using this book - without any confirmation, without or with a very low commission. In Bitcoin, "coins" are just lines in a book, somewhat similar to places on the stock exchange, except that they are much more widely applicable to real transactions.
The Bitcoin ledger is a new type of payment system. Anyone can pay any other amount of bitcoins to another simply by transferring ownership of the corresponding line in the book. Specify the number, pass, the recipient will receive the same amount without authorization and most often without a commission.
The last part is of great importance. Bitcoin is the first major payment system in which transactions are made without or with very low commissions (up to a fraction of a cent). Existing payment systems charge a fee of about 2-3 percent - and this is in the developed countries of the world. In many other countries there are simply no modern payment systems or commissions are much higher. We will come back to this.
Bitcoin is a digital bearer document. This is a way to exchange money or assets between parties that still do not trust each other: a set of numbers is sent via email or, in extreme cases, via SMS. The sender should not know or trust the recipient or vice versa. Accordingly, there are no chargebacks - just like cash - if you have money or property, you can pay them, if not, you can't. This is something completely new. Something that has never existed before in digital form.
Bitcoin is a digital currency, the cost of which is based directly on two things: the use of the payment system today - the volume and speed of payments passing through the ledger - and speculation about the use of the payment system in the future. This is what confuses people. This is not to say that Bitcoin has an arbitrary value on the basis of which people trade; rather, people can trade using Bitcoin (everywhere, without fraud and without or with a very low commission), and as a result it has a cost.
Perhaps it would be correct to say that now the cost of Bitcoin is based more on speculation than on the actual amount of payments, and it is equally true that these speculations set such a high price for a currency that it has become almost impossible to make payments. Bitcoin must be worth something before it can make a certain amount of real payment volumes. This is the classic “chicken and egg” problem with respect to new technologies: such technology is worth nothing until it costs a lot. And therefore, the fact that Bitcoin has partly risen in price due to speculation brings closer the possibility of its actual use much faster than the absence of these very speculations.
Critics of Bitcoin indicate limited use of currency by ordinary consumers and sellers, but the same criticism was expressed against PCs and the Internet at the same stage. Every day, more and more consumers and sellers around the world buy, use and sell bitcoins. Their total number is still small, but it is growing rapidly. Ease of use for participants is also growing, as Bitcoin tools and technologies are improved. Remember, just surfing the Internet was also technically difficult. Now it is not.
Arguments that sellers will not accept Bitcoin due to its volatility are also incorrect. Bitcoin itself can be used as a payment system; sellers do not need to store bitcoins or be exposed to their volatility. Any consumer or seller can at any time sell and buy bitcoins and other currencies.
Why does the seller — whether on the Internet or the real world — want to accept Bitcoin as payment, given the small number of consumers who want to pay in this way? My partner, Chris Dixon, recently gave this example:
“Let's say you sell electronics online. Net profit in this area, as a rule, does not even reach 5 percent, which means that the usual commission of 2.5 percent takes half the profit. This is money that can be reinvested in a business, transferred back to consumers, or paid taxes on them. Of all these options, transferring 2.5 percent to banks for transmitting bits over the Internet is the worst. Another problem sellers face is international payments. If you want to know why your favorite product or service is not available in your country, then most often it’s about payments. ”
In addition, vendors are very attracted to Bitcoin, because it eliminates the risk of credit card fraud. This is a form of fraud that motivates so many criminals to work hard to steal customers' personal information and credit card numbers.
Since Bitcoin is a digital bearer document, the payee will not receive any information from the sender that can be used to steal the sender's money in the future by the seller or the criminal who steals this information from the seller.
Credit card fraud so worries sellers, credit card manufacturers and banks that online fraud detection systems are ready to literally stop a transaction that looks at least a little suspicious, regardless of whether it is honest or not. As a result, many online merchants are forced to refuse 5-10 percent of incoming orders, which could be easily completed if customers paid using Bitcoin, where such fraud is impossible. And since these orders were sent for payment, they represent the highest possible profit for the seller, so the ability to process them will dramatically increase profits for many.
This resilience of Bitcoin to fraud goes even into the physical world of retail stores and customers.
For example, with a Bitcoin, a recent attack that stole credit card information from 70 million customers of the Target department store network would have been impossible. Here's how it works:
You fill your cart and go to the checkout, as now. But instead of giving away your credit card to pay, you pull out your smartphone and take a snapshot of the QR code displayed on the cash register. The QR code contains all the information necessary to send Bitcoin to the Target supermarket, including the amount. You click "Confirm", and the transaction (including the conversion of dollars in your account to Bitcoin, if you do not have the Bitcoins themselves) passes.
Target is happy because he received money in the form of Bitcoin, which, if desired, can be immediately converted into dollars, and did not pay any or paid a very small commission; you are happy because hackers cannot steal your personal information; only organized crime is unhappy. (Well, maybe criminals are still happy: they may try to steal money directly from poorly protected computer systems. But even if they succeed, consumers are not at risk of loss, fraud or identity theft).
Finally, I would like to respond to the statement made by some critics that Bitcoin is a haven for black cases, criminals and terrorists who can transfer money anonymously and with impunity. This is a myth, caused mainly by an excessively vigorous description in the press and an incomplete understanding of technology. Like an easy-to-track email, Bitcoin is pseudo-anonymous, not completely anonymous. In addition, every transaction in the Bitcoin network is permanently recorded in a chain of Bitcoin blocks or a journal accessible to everyone. As a result, it is much easier for law enforcement to track Bitcoin than cash, gold or diamonds.
What does Bitcoin expect in the future?
Bitcoin is a classic example of a network effect, a positive feedback loop. The more people using Bitcoin, the more valuable it will be for everyone who uses it, and the higher the next user will be an incentive to start using this technology. Bitcoin shares this effect with phones, the Internet and popular Internet services, such as eBay and Facebook.
In fact, Bitcoin gets a quadrilateral network effect. Four groups of people are involved in expanding the value of Bitcoin through their own participation, namely: (1) consumers who pay using Bitcoin, (2) sellers who accept Bitcoin, (3) "miners" who manage computers, process and check all operations and ensure the existence of a reliable distributed network, and (4) developers and entrepreneurs who create new products and services with Bitcoin.
All four participants of the network effect play an important role in expanding the value of the system as a whole, but the fourth is especially important.
In Silicon Valley and around the world, thousands of programmers use Bitcoin as the basis for a huge number of new products and services that were impossible before. And in our venture company, Andreessen Horowitz, we see a rapidly growing number of outstanding entrepreneurs (many of them have a reputable financial record) who build their companies on the basis of Bitcoin.
For this reason alone, Bitcoin rivals have a hard time. If something can push out Bitcoin now, then it should be much better, and everything should happen quickly. Otherwise, this network effect will provide Bitcoin dominance.
One obvious and huge area of application for Bitcoin-based innovation is international money transfer. Every day, hundreds of millions of low-income people work in harsh conditions abroad to earn money that could be sent back to their families in their homeland — over $ 400 billion annually, according to the World Bank. Every day, banks and payment companies charge crazy fees, up to 10 percent or even higher, to send this money.
Translation of these transactions to Bitcoin, which implies the absence or low commission, will provide a significant improvement in the quality of life of migrant workers and members of their families. It is hard to come up with something else with a faster and more positive effect for so many people in the poorest countries of the world.
In addition, Bitcoin can be a powerful force that will attract a much larger number of people all over the world to the modern economic system. Only about 20 countries around the world have fully modern banking and payment systems, and the remaining 175 still have a long way to go. Therefore, people in many countries are deprived of the products and services that we in the West take for granted. Even Netflix, a fully virtual service, is only available in 40 countries. Bitcoin, as a global payment system that anyone can use, can be a powerful catalyst for extending the benefits of a modern economic system to virtually the entire population of the planet.
Even here, in the United States, there is a long-recognized problem, which lies in extremely high commissions, which “non-bank” (that is, without ordinary bank accounts) people have to pay even for basic financial services. Bitcoin can be used to solve this problem, because people outside the traditional financial system will be offered services with an extremely low commission.
The third fascinating use of Bitcoin is micropayments or ultra-low payments. Micropayments were never possible, despite 20 years of attempts, because they are unprofitable to carry out (meaning $ 1 and below, up to cents or fractions of cents) through existing credit / debit and banking systems. The payment structure of these systems makes such payments unviable.
And suddenly, with Bitcoin, everything becomes very simple. Bitcoins have an elegant property of infinite divisibility: now up to eight decimal places, but in the future even more. Thus, you can specify an arbitrarily small amount of money, up to a thousandth of a cent, and send it anywhere in the world for free or almost free.
Think, for example, about content monetization. The reason why mass media enterprises, such as newspapers, are forced to charge for content, lies in the fact that they have to ask for money for everything at once (pay the price for all content) or not to ask at all (which we owe to terrible banners in Internet). Bitcoin makes economically viable payment of arbitrarily small amounts of money for an article, section or hour of use, video or access to the archive, for notification of news.
Another potential use of Bitcoin micropayments is combating spam. Future email systems and social networks may refuse to accept incoming messages if they are not accompanied by a tiny amount of bitcoins - small enough not to matter to the sender, but large enough to prevent spammers who today can send billions of spam for free and with impunity posts.
Finally, the fourth interesting area of use is public payments. I first read about this idea in an article a few months ago. During a sports broadcast, a casual viewer stood with a poster with a QR code on which was written “Send me bitcoins!” He received $ 25,000 in bitcoins in the first 24 hours, all from people he had never met before. It was the first case in history when you saw someone with a sign, in person, on TV or in a photo, and then you could send him money in two clicks on a smartphone: remove the QR code on the sign and confirm sending money.
Think of the implications for protest movements. Today, protesters want to get on television, so that people learn about their motivation. Tomorrow they will want to go there, because this is how they will be able to collect money, simply holding in their hands the signs that will allow sympathetic people anywhere in the world to send them money right away. Bitcoin is the embodiment of the dream of financial technology, even the most hardened anti-capitalist politicians.
In the coming years we will have a lot of noise around this new technology.
For example, some prominent economists are quite skeptical about Bitcoin, although Ben S. Bernanke, the former Federal Reserve chairman, recently wrote that digital currencies, such as Bitcoin, “can last long enough, especially if they contribute to faster, safer and more efficient carrying out payments. " In 1999, the legendary economist Milton Friedman said: “One thing that we lack, but which will soon be developed, is reliable electronic money, a method by which it will be possible to transfer funds from A to B on the Internet, even if A and B strangers is a method by which I can take 20 dollars and pass them on to you, and you will get them without even knowing who I am. ”
Economists who attack Bitcoin might be right today, but I agree with Ben and Milton.
In addition, there is no need to harmonize regulatory and other issues, as the regulatory framework governing banks and payments in countries around the world did not expect the emergence of such technology as Bitcoin.
I hope I showed you how big the future is for Bitcoin. This is no ordinary libertarian fairy tale or Silicon Valley bubble. Bitcoin offers a radical opportunity to rethink how the financial system can and should work in the Internet era, as a catalyst for changes that will be equally useful for ordinary people and companies.
Article translated specifically for the corporate blog Host-tracker.com - service monitoring site performance.
Source: https://habr.com/ru/post/210126/
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