Privacy and Decentralization

Every time I have mentioned the word “Bitcoin” in a public space, I have been bombarded with questions regarding this special digital currency. There is something fascinating about instant, global, decentralized, peer-to-peer, electronic cash that really gets the people (especially myself) going. After months of research, I was able to compile my own opinions about what makes Bitcoin and other Cryptocurrencies so attractive and important. There are two attributes that stood out to me above all others: privacy and decentralization.

Privacy:

Cryptography and privacy-enhancing technologies were the Cyperpunk’s battle cry beginning as early as the 1980’s. A group of tech-heads, computer geniuses, developers, and coding gurus calling themselves the “Cypherpunks” created a mailing list that in turn formed a community. This mailing list contained endless ideas about cryptography, cybersecuirty, and open source codes to bring it all together. Amongst the Cypherpunks was a person that went by the fictional name Satoshi Nakamoto, the creator of Bitcoin. Satoshi was a brilliant individual that never shared any personal information when discussing his ideas of digital currency and to this day remains completely anonymous. Below is an excerpt from Satoshi’s Bitcoin White Paper: https://bitcoin.org/bitcoin.pdf

Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power.
Let us set aside the technical jargon such as hashing, proof-of-work, and time stamps for the time being and focus on the main points of this abstract. Satoshi had just proposed a completely private, instant, decentralized currency that only exists in the digital realm! This is what Satoshi’s privacy looks like:

What I find most valuable about Bitcoin is the fact that it is not attached to any of my personal information. For example, when opening a bank account, you will often need some forms of identification: social security, phone number, address, etc. This creates a digital footprint that is traceable by anyone that has access to the data. Every time you swipe your card there is a digital database that takes note of the information that consequently comes with that purchase. The time, location, amount, and plenty of other data is collected and stored within your bank or third party institution. When you own Bitcoin, none of your personal information is ever required or asked for. When you convert your USD to BTC (Bitcoin) and send your BTC to your digital wallet you are given two pieces of information: your private key and public key.

“A private key in the context of Bitcoin is a secret number that allows bitcoins to be spent. Every Bitcoin wallet contains one or more private keys, which are saved in the wallet file. The private keys are mathematically related to all Bitcoin addresses generated for the wallet. Because the private key is the "ticket" that allows someone to spend bitcoins, it is important that these are kept secure. Private keys can be kept on computer files, but in some cases are also short enough that they can be printed on paper."

https://en.bitcoin.it/wiki/Private_key

“As mentioned, there is also a public key. This causes some confusion, as some people assume that a Bitcoin wallet address and the public key are the same. That is not the case, but they are mathematically related. A Bitcoin wallet address is a hashed version of your public key.”

http://www.dummies.com/software/other-software/bitcoin-public-private-keys/

This means that only YOU hold the private key to your digital wallet. It is not tethered to your name, address, social security, or even your email in most cases. This evokes complete privacy and keeps your transactions completely anonymous. In a world where data is now more valuable than diamonds, keeping your transaction history private is extremely important. Bitcoin offers that complete privacy with minimal digital footprint. With privacy comes these subsequent benefits: no third-party seizure, no taxes, no tracking, very low or no transaction costs, no risk of “charge-backs,” and Bitcoin cannot be stolen. This is not a currency for a government. It is a currency for the people, by the people, on open source code available for the people.

Decentralization:

Decentralization is by far my favorite attribute regarding Bitcoin and Cryptocurrency. Imagine a world where you had complete control over your wealth and assets. That means no banks, government, or third party institution having anything to do with what you personally earned or own.
So, what is decentralization? Decentralization is the process of redistributing or dispersing functions, powers, people or things away from a central location or authority. Bitcoin is just that. Bitcoin is a part of a decentralized peer-to-peer network that does not rely on a central authority. It exists only on the network of people that use Bitcoin.
“Bitcoin works as long as each peer is connected to a single peer telling the truth, even if every other is lying. This is the key feature that distinguishes Bitcoin from other networks that rely on trusted entities for determining truth.“ https://medium.com/@alpalpalp/why-decentralization-matters-fa016a90f595

There are many flaws that exist in centralized systems. Censorship is a big one. When a central authority or entity wants to alter or censor data in a system, they can do so without alerting the users. These changes can go unnoticed and prevent the flow of transactions to or from certain sources. Satoshi commented on the flaws of centralized systems when he stated “Governments are good at cutting off the heads of a centrally controlled network like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.” Another wonderful benefit of decentralization is seizure resistance. Centralized systems can easily be taken over and massive amounts of funds can be seized without the user’s permission. With the Bitcoin network there is no one single origin to attack. The network exists on every single user’s computer that is connected. Instead of attacking one central point attackers would have to attack every single computer on the network to steal assets. Decentralization is the foundation of all Cryptocurrency.

Public interest in Bitcoin is growing at a rapid rate and for some incredibly good reasons. Digital privacy in regards to transactions is practically of the past in today’s word, but Bitcoin and the technology behind it give you the means to take back that that invaluable characteristic. Decentralization, another driving idea behind the technology of cryptocurrency, prevents instances of theft which occur on almost a regular basis in today’s centralized system. The people have had enough of the diminished digital privacy and constant threat of information/assets being stolen from centralized public servers. It is time to take the power of away from the institutions that control our wealth and assets and put the power back into the user’s hand!
#BuyBitcoinHTX :smiley:

@CryptoCollin