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Technology & Money: Don't hate on Bitcoin

Regardless of your opinion, the rise in popularity crypto and can not be ignored. There are plenty of billion-dollar businesses that accept Bitcoin as a form of payment. Now let’s not confuse the terms Bitcoin and Blockchain. Bitcoin is a form of crypto that runs on a blockchain system. When Bitcoin first hit the scene, Blockchain was introduced as well. We give all the praise to Bitcoin because it became our first cryptocurrency however the real winner is the Blockchain system.

Blockchain systems has truly merged technology and money.

Blockchains store information in a distributed network, including a history of all transactions that have occurred on the network. The distributed data storage is fault-tolerant with no single point of failure. The distributed network also provides further built-in security: many machines, owned by many different entities, all agree on the data that is stored in the blockchain. As a result, malicious parties cannot change the data stored in the network without owning a very large part of it.

- Sir Tim Berners-Lee, acclaimed as the 'father of the web’

Short History of Money

The earliest method for exchanging valuables was barter (i.e., the direct trading of one product or service for another, without the mediation of money). However, money (a token which represents value) was soon found to be extremely efficient in boosting commercial exchanges.

Different physical materials have been used for this purpose over the years: stones, gems, precious metals, etc. During the 19th century, gold became a widespread standard, but it has coexisted with other forms of money for some time, including paper money (1661) and credit cards (1946).

The most recent step in this evolution has been digital money – or cryptocurrencies. Blockchain was actually first conceived as a technical support for Bitcoin, the first viable decentralized cryptocurrency (2009).

Monetary and Financial Institutions

Once money ceases to embody physical value – as in the case of paper money no longer backed by gold – its value becomes symbolic: it relies on trust and depends upon the value that people and markets grant to the token.

As monetary systems became more complex, banks emerged as trusted third parties to support and verify transactions. Later, currencies themselves came to require more active management and as a result, national institutions (such as national or central banks) were founded.

National banks began to mint coins, print paper money, regulate exchanges and, in some cases, to take appropriate measures in the face of financial and economic crises.

Originally, most national banks tended to back the value of their currencies with gold held in reserve. However, more recent monetary management systems do not function in this manner: nearly all fiat currencies have been delinked from gold.

What is fiat money?
Fiat money is a type of currency that is not backed by any commodity such as gold or silver. It is typically declared by a decree from the government to be legal tender. Throughout history, fiat money was sometimes issued by local banks and other institutions. Wikipedia

It was in this atmosphere of mistrust toward financial institutions that Bitcoin was proposed by Satoshi Nakamoto in 2008. Created in January 2009, Bitcoin was initially conceived of as a way to undertake transactions without the need for a trusted third party. As a result, this first cryptocurrency is not controlled by banks or governments. Nevertheless, this ambitious project required a new type of technological support.

The best way to learn more is to get involved. Use blockchain to better understand it. Here’s a good gem to read to get you caught up on Bitcoin

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