Cryptochainbitcurrency... What?

Organised distribution

Have you fallen for an embarrassingly simple trick? That trick is to use the words

• Bitcoin
• blockchain
• cryptocurrency
• digital currency

interchangeably

...as if they are all the same thing. They are not.

A blockchain is a cryptographically secured ledger that can be permissionless and decentralized. The geeks in the crowd will appreciate the fact that the blockchain is a stupendously elegant solution to some incredibly complicated problems in the obscure recesses of arcane subjects like distributed computing and payment processing.

Blockchain introduction
But for the non geeks, perhaps this will suffice. Some of the oldest documents ever discovered have been Ledger's of one sort or another. Medical records, legal and business contracts, accounting ledgers. As long as there has been civilization there has been the need for secure and accurate record-keeping of transactions and events. And since the birth of civilization there has only been one way to keep those records. A system where a recognized central administrator stores secures and updates that ledger until now that is with the advent of the blockchain an accurate ledger can now be maintained without a single central point where that information is stored

So how does it work and what does it do? Mike Maloney, the filmmaker behind the popular "Hidden secrets of money" documentary series describes it this way the system

Watch from the start up to 18:37

But what specifically does it print well? Whatever you want it to

So, it can be used as a tool for creating smart contracts or registering land ownership or creating decentralized cryptocurrency. This is where Bitcoin comes in so what is Bitcoin actually ? Bitcoin is a peer-to-peer cryptocurrency, whose transactions are recorded in a public blockchain ledger.

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There are three things to note about this description of Bitcoin:

- Bitcoin is just one application of the blockchain ledger technology. They are not the same thing
- Bitcoin is not blockchain & blockchain is not Bitcoin
- Bitcoin uses the blockchain innovation to run an electronic payment system

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Confusing these terms is a purposeful tactic that salesmen are using to sucker a public that sees the Bitcoin bubble and believes this is the next great investment opportunity.

This technique has been ridiculously effective in some cases. In one infamous example the Long Island iced tea corporation recently rebranded as the "Long Blockchain Corporation". They still make iced tea, they just added blockchain to their name and the market responded. The company's stocks tripled overnight.

This is the exact phenomenon we saw emerge during the .com bubble when any company that added .com to their name saw their stock price rise and it is a sure sign that people are being baffled by techno speak that they don't understand in the slightest.

Andres Antonopoulos provides some straightforward advice for "Separating blockchain from BS"

The second thing to note in definition of Bitcoin is that it is a cryptocurrency. That means it uses cryptographic functions to secure and verify transactions on the network and to control the issuance of new units.

Bitcoin conforms to a certain protocol and that protocol defines the rules by which the Bitcoin network operates. You can tweak those rules and create similar but separate payment systems each with its own qualities. These Bitcoin like cryptocurrencies are called altcoins.

Thirdly, Bitcoin uses a specific kind of blockchain ledger called a public or permissionless blockchain. This means anyone can join the network and contribute to the maintenance of the ledger - mining in the Bitcoin parlance.

There is another kind of blockchain called a private or permissioned blockchain that requires nodes to be invited to join the network or otherwise given permission to participate in maintaining the ledger. And as a further level of analysis it should be noted that all cryptocurrencies are digital currencies but not all digital currencies are cryptocurrencies.

The blockchain could be used to create digital currencies that represent the very vision of a totalitarian tyrants wildest wet dream, central banks could use private blockchains to administer national digital currencies that permanently record and track every transaction in the economy. That currency could be distributed through government-issued digital wallets that act as an individual ID and allow the government to track everything you ever purchased back to you personally. It could be used to create the perfect system of canopic oversight and the totalitarians could as sole proprietors of the private blockchain target anyone they saw as a threat for removal from the economy by simply revoking their wallet without the permission.

Cryptocurrencies can now be and already are being used by millions around the world.

Startups have raised billions of dollars in capital through ICOs without the investment bank

More broadly a whole host of banksters and their associated cronies in the third-party middlemen parasitic class...are already openly contemplating the fact, that they have already been made obsolete by the blockchain technology which underlies the cryptocurrency boom.

So is the blockchain the one and only silver bullet that will end banking all by itself? Don't be ridiculous!