Satoshi Nakamoto, the creator of bitcoin, introduced the world’s first cryptocurrency bitcoin about a decade ago. Since then, the world’s first cryptocurrency has gone through a journey with several ups and downs before becoming the world’s largest cryptocurrency by market cap as well. According to well-known personality Tim Draper, who is a billionaire investor, bitcoin is a startup currency. Explaining the true essence of bitcoin, Draper said:
Bitcoin is a currency that is global, open, transparent, and decentralized. With it, people everywhere can send money frictionlessly, without the need to pay banks and credit card companies (2.5–4%), Western Union (8–16%), or central government authorities (whatever they take).
Bitcoin allowing peer to peer payments is built on a public blockchain so both parties can easily track down the transaction and relevant information. Moreover, parties can even see the status and balance of other parties, hence, that explains why bitcoin is regarded as a transparent cryptocurrency by Draper.
As bitcoin facilitates peer to peer transactions while providing sufficient transparency for both parties, there remains no need for a supervisory authority to monitor the transaction. Due to the absence of central authority such as banks or companies like Western Union, people can easily transfer funds across borders with extremely low transaction charges.
Apart from global, open and transparent currency, bitcoin is also a decentralized digital currency. There is no government, authority, company or organization behind bitcoin. That’s why bitcoin, only obeying the fundamentals of supply and demand, isn’t under the influence of any authority. Unlike any other fiat currency, bitcoin’s price isn’t controlled by anyone.
The aforementioned attributes of bitcoin have disrupted the current financial system composed of financial institutes circulating fiat currencies that devalue over time due to inflation. Opposed to fiat currencies, bitcoin doesn’t lose its value due because of inflation. It has a finite supply of 21 million so it can’t be created as much as wished whereas fiat currencies can be printed as much as wanted.
Apart from explaining the true nature of bitcoin and elaborating on its signature features, Draper shared his vision regarding the world’s first truly decentralized cryptocurrency. Describing the impact of bitcoin on the entire world, Draper stated:
With Bitcoin, and the decentralization that comes with Bitcoin, geographic borders have become less relevant. No longer are we at the mercy of dictators and toll trolls to grow the world economy…….. In the long-term I believe with regard to business and economics, we are, more than ever, one world.
Afterward, Draper emphasized that tribalism, a system that started ages ago to organize people and their businesses, was dying. At the same time, he thinks that in the realm of increasing globalism, bitcoin has its own role to play. Sharing the significance of bitcoin in the current environment, Draper said:
Bitcoin made it clear to us all that we can all share in the same global economy with the same basic values using a unifying global currency. Those that resist this global currency cling to tribalism by saying things like, “I don’t understand bitcoin.” Or “Bitcoin was just a means to an end. The blockchain is the thing.” or “bitcoin is not money because it is not backed by any (tribe).
Draper has been quite bullish about cryptocurrencies in the past as well. At the moment, he explained how bitcoin was borderless and decentralized whereas in the future, Draper will be explaining how the technology brought by bitcoin will transform industries by collaborating with other advanced technologies such as artificial intelligence (AI), etc.
Bitcoin brought with it a few fundamental technologies that can accelerate our transformation from a tribal planet to a global one. In this, my second book, I will explain why I think these technologies, when combined with artificial intelligence, will transform not only industries like banking, finance, health care, real estate and insurance, but also the biggest of them all: government.