Overview of the practical side of Bitcoin

Introduction

Many Bitcoin was impressed and disappointed. He became the subject of many discussions. On the one hand, this is a revolutionary implementation of a decentralized money transfer system, which is in many ways similar to the utopian one. On the other hand, this is a very difficult and powerful thing to understand, which has been the subject of not only media attention, but also criminal fraud. In the article we will look at what has become so controversial in the new technology, and why development did not go as smoothly as it should have been in theory.

The material is not particularly complex and oversaturated with technical details and is intended for everyone who at least understands what will be discussed further.

Theory

In elementary cases, the value of money is determined only by their quantity and rate of turnover, it is also popular. This is especially true for currencies that are not backed by anything. Since the number of coins is limited in advance and their limit will be released in the foreseeable future, there remains one factor affecting the cost - popularity. For example, the main fluctuations in the course accounted for moments of active advertising / anti-advertising Bitcoin and other external factors, such as disabling mine-farms, significant purchases / sales of coins, hacking all sorts of online services operating Bitcoin. All this had a direct impact on people, and subsequently - on the cost of Bitcoin.
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As a result, we can conclude that the cost of this kind of currency depends on the connection with people. These connections form many factors. The main ones are:

• Benefit
• Degree of implementation
• Usability

In the current implementation of the idea of ​​cryptocurrency conditionally there is only a benefit - the transactions are very cheap, and sometimes completely free. Why conditional? The answer is simple - you can’t, without being foolish, say that the remaining two points are fully provided for, which makes the course up to disgrace unstable.

So, for the sale of ready-to-use currency, you need at least one more item. Implementation is a really effective way - an example is the dollar. But this is not a free implementation path. First of all, it requires quite a lot of capital and investments. Secondly, it is contrary to the idea of ​​democracy, where, ideally, everything should be for people, their freedoms.

On the other hand, you can create a very user-friendly product that will appeal to people and be beneficial. Yes, usability , this is a long lever for development, which is key in this area, and product promotion, but, alas, not everyone focuses on this.

The goal is set, there is a task and reference points. Consider what is wrong.

High entry threshold

For the first time, trying to get acquainted with Bitcoin, the user is faced with a bunch of material describing how it works. This is really good, and even correct, because the system should be transparent, without secrets, etc. But this is clearly not what a new, ordinary user is looking for. He is not interested in how and why it works, he wants to know how to use it. So, visiting bitcoin.org , the first step is to look into the theory, principles of operation. Alas, not everyone can understand even an elementary explanation that would appreciate the "novelty". Moreover, it will even scare many, and the user will run away, thinking that it is inconceivably difficult. It is worth noting that such a majority and recall that this kind of currency rests on the number of users. Roughly speaking, the first step makes the impression that the product is focused on a narrow circle of users, which is clearly wrong.

Security

Of course, Bitcoin is practically not subject to hacking or theft in the sense that we are used to talking about banks and frauds with plastic cards. In this case, we will not talk about hacking online wallets, because the user chooses who to trust: himself or the office. But security is not only resistant to hacker attacks and fraudsters. A big role is played by the ease of losing your wallet, along with all the money stored on it. The breakdown of the hard drive, the "rally" of Windows, "pressed the wrong button" - these are very common causes of information loss, and in the case of cryptocurrency, and money. In this sense, the wallets themselves play a big role: intrusive warnings and many options to keep your money in a safe place will not become as terrible as loss of savings and angry reviews in the direction of Bitcoin.

Reliability

The system was conceived as decentralized. So it was, however, only at the very beginning. Quite quickly, those who wanted to earn extra money appeared who had a couple of top-end video cards. Now the situation has become even more complicated - huge mine-farms were built, because of which the complexity of coin mining rose to the skies, and the usual geek with video cards should not even try to support Bitcoin, even for an idea, not a profit. As a result - the centralization of network resources in a few points. This may respond to an attack of 51%, about which quite a lot has been written. It should be noted that such a collapse has not yet occurred, but there is a tendency and probably this will have to happen.

Anonymity

Let's get to the point right away - Bitcoin has a public log of operations and it is everlasting. This means that having performed an online operation, it is permanently recorded and accessible to everyone. Having paid once for real services, you deanonymize yourself in relation to your wallet. If someone finds out that you own a specific wallet, he will also be able to find out the whole history of your operations with him. This, to some extent, decides the creation of a new wallet for each new operation. But this, at least, interferes with the goal that needs to be achieved - usability.

Total

Bitcoin is an excellent implementation of a new idea, but it did not take into account that in order to fully achieve the goal, this should be not just an implementation, but really a product ready for the masses. But maybe the author wanted to achieve the goal just to realize? If this is so, then he is worthy of respect, since his project could change the view of this area so much.
Well, it remains for us, reinforced by new experience, to create a new, ready-to-use system. As Louis Brandeis once said: “There are no great writers, there are only great copyists.”

PS In the future, I plan to explore other implementations of this technology, which I will share with you.