Writing a paper on common media misconceptions and how bitcoin works behind the scenes, and wanted your input.
It seems that the exponential growth in 2017 -specifically Q4- has grabbed media and society's attention. Most people are seeing bitcoin as a way to make a quick dollar, and are not looking at the true potential in bitcoin. Hopefully, with these blog posts, I'll be able to enlighten people on cryptocurrencies.
Media has been quick to label bitcoin as something only sketchy people would do. "Hacker" and "Criminal" are words with very negative connotations and are associated with bitcoin. This could only be further from the truth. To understand bitcoin's original proposal, we have to look at Satoshi Nakamoto's -the person(s) who created bitcoin- whitepaper. In Satoshi Nakamoto's whitepaper(
https://archive.org/details/BitcoinAPeer-to-PeerElectronicCashSystem), the title is "Bitcoin: A Peer-to-Peer Electronic Cash System". And that's really what bitcoin cash, it's a form of currency that deals directly from person to person, not through a middleman. So for instance, if I went to my local coffee shop and used my credit card, I would have gone through a middleman, a payment processor like Visa. But, Satoshi Nakamoto is saying that this is not the way commerce should be conducted. That commerce needs to eliminate the middlemen. That commerce needs to be decentralized.
Something else media has been quick to point to is that bitcoin has no value. But that's a tricky subject. Because, answer this question for me, "What is value?". Pretty hard to answer huh? Nothing is backing the price of the USDollar (Don't say the gold standard, because I can just counter with what backs the price of gold?). And who dictates the price of the USD compared to the EUR? I'm just rambling at this point, but the main idea is that to say bitcoin has no value is complete fearmongering. Nothing in this world would have value if it wasn't for price and demand, and that's my answer for assessing the value of bitcoin.
The third media nitpick is how bitcoin can be hacked. This simply is not true and is another opinion media uses to instill fear into the population. Skeptics will say that exchanges or webwallets can be hacked which resulted in the loss of user funds. Yes, this is true, but only because it brings a centralized aspect to a decentralized network. In order to ensure that your bitcoin cannot be hacked, you must make sure that you have control of your private key.
Now, what is a private key and how is a bitcoin transaction performed? This diagram(
https://en.wikipedia.org/wiki/File:Bitcoin_Transaction_Visual.svg) from Satoshi Nakomoto's whitepaper explains it in detail. Now with each bitcoin address, there is a public and private key used to verify and signoff every transaction broadcasted to the bitcoin network. An addresses' public key is used to verify a transaction, and a private key is used to verify a transaction. Think of it like this, your public key is used to create and verify the information of a legal contract. Nothing has happened unless you sign on the dotted line, which in this case would be your private key.
Now I feel this is a good stopping point. I've told you a bunch of terms commonly used in the bitcoin ecosystem, and I feel that if I were to continue for much longer this post would be overcomplicated. But if there was any conclusion to this, its that you don't need to know what happens behind the scenes to use bitcoin. You most likely don't know how an email works, but its one of the first things you check when you enter the workplace. If I were to advertise bitcoin, I would say it is "A Peer-to Peer Electronic Cash System".
