Gateway to Glimmer Picture it; awakening in the company of the sun from within our bedroom with the morning light spilling in through the arched windows rising towards the Edwardian ceiling. Slipping into mink slippers and a dressing-gown, you exit your abode and descend spiral stairs of wrought iron, embellished with feline forms and the medieval rose, out into a magnificent garden to a prepared breakfast, ready to spend yet another day in the company of your lilac British shorthair, fashioned in a sparkling diamond collar. This is a fantasy we all have, but this life of limitless leisure could have been our reality if we, several years ago, had a moment of clairvoyance and invested into Bitcoin. Mentioned frequently on internet but almost never in real life, what is bitcoin? Having searched for the answer, I found that it is elusive, impervious when caught and very complicated one it has been unravelled. This is shown by the Financial Conduct Authority reporting that 74% of Bitcoin investors could not provide an explanation or definition of what this investment was. Therefore, to save you from financial ruin, I have taken upon myself the duty of explaining within the following paragraphs what bitcoin is, why it was invented and why it has appeal. Unfortunately, things are never simple, especially matters relating to financial technology, and requires me to preface the bitcoin explanation with a history and analysis of money as a concept and financial systems with the evolution of these systems. Money can be thought as a physical manifestation of quantified value, of which the value of labour is expressed. Money has omnipresence throughout civilisation, manifesting itself as pebbles, seashells and nuts at different stages in our long winding history. One thing uniting all of these different monetary forms is that the societies who were operating with them believed they possessed a universal value. For the past several centuries, gold has been the chosen medium that we perceive to have captured value. Everyone reading this will have no memory of metalism, the trading in gold and other precious metals. The arrangement of our present economy was borne from the practicality of paper, with the cumbersome aspect of gold bestowed by its proportions and weight. To alleviate the problems that were present in this metallist economy, banks and governments offering the service of reservation of gold within its vaults and to be exchanged for paper receipts corresponding to the received value, which can be traded back for the gold at relative ease. Understandably, trading a paper receipt valued at one-pound sterling for an identically priced good is infinitely more practical than cutting and weighing one onethousandth of a gold bullion valued at one-thousand-pound-sterling. This dynamic of trading receipts with the value tied to gold held within a banks’ reserves was titled the ‘Gold Standard’. To the exclusion of the history and politics under the demand of brevity, the government eventually held itself liable for the reserved gold. The trading of these notes continued unabated due to the reasoning of the citizenry believed that their governments follow through with their promise and payment of the recipient. This mass trading of paper notes possessing value granted from the financial promise of a government is named the ‘Fiat System’. Fiat being a Latin word for ‘by decree’, captures the relationship between money and government, by which money’s value is bestowed under governmental order. Two key tenets underpin a Fiat System. The first being Centralisation, a single authority exercising control over money itself, and Unlimited Quantity, that same central authority can printing whatever quantity of money central authority desires. Many people take issues with these aspects of the Fiat System, our present-day system, as three fundamental problems stem from them. The first is the value reduction of fiat currency following the printing. For example, a 1914 gold bullion was equal to one 1914 pound-sterling. Now, after multiple printings, in the year 2019 to purchase a 1914 gold bullion requires £233 using the pound sterling of 2019. This is a 99.57% decrease in value in just over a century. The second problem is the corruption of the Central Authority induced from the sheer power that the central authority possesses, being the single power operating the money monopoly. Finally, centralisation, discussing the problems that occur were the central authority can repeal the legality of whatever legal tender they choose, rendering that tender obsolete. This has been recently enacted within this country, where UK banks had placed a time limit on the use of old versions of tenure to promote the uptake of new polymer notes. These are the proven concerns of some sections of society and the limitations of the central authority’s money system, Fiat, that spurred the development of Bitcoin. In 2008, a flagship whitepaper was released onto the internet authored under the pseudonym Satoshi Nakamoto, detailing what Bitcoin was and that it was invented as a solution to the Fiat monetary system. Bitcoin is a decentralised cryptocurrency. Bitcoins are not physical coinage but an address record from which you can send and receive money. When someone purchases bitcoin, they purchase a bitcoin address. What separates bitcoin from our conventional banking system is that unlike the ledger, a collection of transactions within the financial system wherein it is stored on a banks central computer of which the public is not privet, the ledger of the Bitcoin system is available freely online at any time and is entirely transparent, showing all the transactions occurring in real time between the various bitcoin addresses. Bitcoin was developed as a solution to the three fundamental limitations with the present-day money system and the newfound and historically unsolvable problem of digital money duplication. With each bitcoin user possessing a perpetually updating ledger, it renders the transaction record collection impossible to be tampered with. To achieve this, every single computer under the use of a Bitcoin user will have to be hacked and altered to catch all of the ledgers. This impracticality will mean that the duplication of files would break the consistency of the universally owned ledgers and sound the alarm, highlighting the incongruent information. This ledger network is called a Blockchain. This Blockchain provides greater security and continuity for the Bitcoin trading system. These factors are the reason why bitcoin is spoken with great enthusiasm where the realms of finance and technology melt together, commonly accentuated to Fintech. Bitcoins present a scenario for money similar to what the internet had to offer for information. Before the advent of mass
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