The 2008 financial crisis exposed many shortcomings of banks and financial institutions and rocked people's’ faith in the banking system. And not in a fun Freddie Mercury way. People wanted a currency that was not run by a central authority like a bank. This is where Bitcoin steps in the post-2008 financial crisis. A person (or group of people) using the pseudonym ‘Satoshi Nakamoto’ released a white paper that proposed a new digital money system that looked to replace the need for central authorities like banks and financial institutions to facilitate transactions. This system based on cryptographic proof rather than trust would essentially help improve transparency, democracy, security and accountability. And cryptocurrency was born.
Bitcoin became the very first cryptocurrency to debut this point, but over the last ten years hundreds of different types of cryptocurrencies were created, each offering different use cases. This vision of a new financial system is being adopted rapidly with many people in the last decade buying into Bitcoin. More recently, cryptocurrencies have become a global phenomenon with everyone talking about this new but often misunderstood technology.
People should care because the way that we use money is constantly evolving. The technology that we see today is always evolving and incrementally changing how we live. Whether it be decentralisation or better transparency - there are a lot of potential benefits that this new global phenomenon may bring. It's worth listening in and understanding what it is about, to understand how it may fit into our lives in the future.
Gareth Cliff and Simon Dingle delve deeper into this topic in this Decrypto podcast. They discuss where it all began, how it works and the technology behind the trend.
- Your bank balance exists digitally and there is no manifestation of that money anywhere in the world. So the idea of ‘digital money’ isn't new by any means.
- We know we can trust numbers. Every time we’ve checked in the last few thousand years, 2 + 2 still equals 4. If we’re going to extrapolate from mathematics then we can build a system where we can store information immutably and transact with each other in a way that instils confidence.
- Slow and steady wins the race for a new technology to be successfully integrated into society and the same applies to cryptocurrencies and blockchain technology. You don't want things to become too prominent too quickly as this creates points of failure.
- Cryptocurrencies are in a regulatory environment which threatens some of the most powerful people and institutions on Earth.
Link to full episode: http://iono.fm/e/607225
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