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why bitcoin matters - what is a smart board

by:ITATOUCH     2019-08-23
why bitcoin matters  -  what is a smart board
Editor's note: Anderson Horowitz, Mark Anderson's venture capital firm, invested less than $50 million in Bitcoinrelated start-ups.
The company is actively looking for more bitcoin.
Investment opportunities.
The number of Bitcoins he personally owns does not exceed the minimum.
A mysterious new technology has emerged, seemingly ubiquitous, but is actually the result of 20 years of intensive research and development by nearly anonymous researchers.
Political idealists project the ideal of liberation and revolution on it;
The elite sneer at it.
On the other hand, technical experts are troubled by it.
They saw its huge potential and patched it up in the evenings and weekends.
Despite the regulatory debate over the pros and cons of Bitcoin, this volatile digital currency raises the question: what makes money, money?
Ultimately, the emergence of mainstream products, companies and industries commercialize it;
Profound influence;
Later, many people wondered why its strong commitment was less obvious from the beginning.
What technology am I talking about?
Personal computers in 1975, the Internet in 1993, and bitcoin in 2014.
It's hard to blame bitcoin for being an undiscovered topic, but the gap between the media and what many ordinary people think of Bitcoin and what more and more technical experts think bitcoin is, it's still huge.
In this article, I will explain why bitcoin has so many Silicon Valley programmers and entrepreneurs and what I think is the future potential of Bitcoin.
First of all, Bitcoin is a breakthrough in computer science at the most basic level. it is based on 20 years of research on cryptocurrency and 40 years of research on cryptography, thousands of researchers around the world
Bitcoin is the first practical solution to the long-standing problem known as the Byzantine general problem in computer science.
Reference the original file that defines B. G. P. : “[Imagine]
A group of generals of the Byzantine army and their army camped around the enemy city.
The generals can only reach agreement on a common battle plan through messenger communication.
However, one or more of them may be traitors trying to confuse others.
The problem is to find an algorithm to ensure that loyal generals can agree.
More generally, B. G. P.
The question of how to build trust between unrelated parties on untrusted networks such as the Internet is raised.
The actual result of solving this problem is that bitcoin for the first time provides us with a way for an Internet user to transfer a unique digital property to another internet user, this ensures that the transfer is safe. everyone knows that the transfer has occurred and no one can question the legality of the transfer.
The consequences of this breakthrough are beyond words.
What kind of digital property might be transferred in this way?
Consider digital signatures, digital contracts, digital keys (
Physical lock or online locker)
Digital ownership of physical assets such as cars and houses, digital stocks and bonds . . . . . . And digital currency.
All of this is exchanged through a distributed trust network that does not require or rely on a central intermediary such as a bank or broker.
In all ways, only the owner of the asset can send it, only the intended recipient can receive it, and the asset can only exist in one place at a time, everyone can verify the transaction and ownership of all assets at any time.
How does this work?
Bitcoin is the Internet.
Widely distributed ledgers.
You purchase ledgers by purchasing one of the fixed number of slots with cash or products and services that sell Bitcoin.
You sell the ledger by trading your bitcoin to someone else who wants to buy the ledger.
Anyone in the world can buy or sell ledgers at any time without approval, no need or very low fees.
The Bitcoin "coin" itself is just a slot in the ledger, similar in some respects to the seat on the stock exchange, but more broadly applicable to real-world transactions.
Bitcoin ledger is a new payment system.
Anyone in the world can simply transfer ownership of the corresponding period in the ledger to pay any value of Bitcoin to anyone else in the world.
Enter the value, transfer it, the recipient will get the value, there is no need for authorization, and in many cases there is no need for a fee.
The last part is very important.
Bitcoin is the first Internet payment system that does not charge any fees or very low fees (
To a few cents).
The existing payment system charges around £ 2 to £ 3%, which is in developed countries.
In many other places, either there is no modern payment system or the interest rate is much higher.
We will come back.
Bitcoin is a digital bearer.
This is a way to exchange money or assets between the parties without pre-
Existing trust: send a string of numbers via email or SMS in the simplest case.
The sender does not need to know or trust the receiver and vice versa.
Related, no refund. You can pay with it if you have money or assets, which is literally similar to the part of cash;
You can't do it if you don't.
This is brand new.
This has never existed before in digital form.
Bitcoin is a digital currency whose value is directly based on two things: the use of the payment system today-the number and speed of payments run through the ledger, and speculation about future use of the payment system.
This is a confusing part.
It doesn't matter that Bitcoin has some arbitrary value and then people trade with it;
People can trade in Bitcoin (
Anywhere, anywhere, no fraud, no or very low fees)
Therefore, it is valuable.
At present, the value of Bitcoin is more based on speculation than actual payments, which may be correct. But it is also true that speculation is building a price high enough for this currency, and payment has become possible.
Bitcoin must be valuable before it can withstand any number of real currencies
World payments.
This is the classic "chicken and egg" problem of the new technology: it is not valuable until the value of the new technology is high.
So the fact that Bitcoin's value growth is partly due to speculation makes Bitcoin more practical than in other cases.
Critics of Bitcoin pointed out that the use of ordinary consumers and merchants is limited, but at the same stage, the same is true of criticism of personal computers and the Internet.
Every day, more and more consumers and merchants buy, use and sell bitcoin around the world.
The overall number is still small but growing fast.
With the improvement of Bitcoin tools and technologies, the ease of use of all participants is rapidly increasing.
Remember, Internet access used to be technically challenging. Now it’s not.
It is also incorrect for merchants not to accept Bitcoin criticism because of Bitcoin's volatility.
Bitcoin can be used as a payment system;
Merchants do not need to hold any Bitcoin, nor do they need to be affected by Bitcoin fluctuations at any time.
Any consumer or merchant can enter and leave Bitcoin and other currencies at any time.
Given the small number of consumers currently wanting to pay in Bitcoin, why would any merchant want to accept Bitcoin payments online or in the real world?
My partner Chris Dixon recently gave an example: "Let's say you're selling electronics online.
The profit margin of these enterprises is usually below 5%, which means the traditional profit.
5% of the payment cost consumed half of the margin.
The money can be reinvested in businesses, returned to consumers, or taxed by the government.
Of all these choices, 2 are given.
5% banks moving bitters on the Internet is the worst option.
Another challenge for merchants in payment is to accept international payments.
If you want to know why your favorite product or service is not available in your country, the answer is usually payment.
In addition, because bitcoin eliminates the risk of credit card fraud, merchants are very interested in Bitcoin.
This is a form of fraud that has prompted many criminals to put a lot of work into stealing personal customer information and credit card numbers.
Since bitcoin is a digital bearer, the recipient of the payment will not get any information from the sender that can be used in the future to steal money from the sender, or is a merchant, or the criminal who stole information from the merchant.
Credit card fraud is such an important thing for merchants, credit card processors and banks that the online fraud detection system is
Trigger connections to stop transactions that look even a bit suspicious, whether they are really fraudulent or not.
As a result, many online merchants are forced to reject orders from 5 to 10%, and if customers pay in Bitcoin, they can accept these orders without fear because such fraud is impossible.
Since these orders have entered, they are essentially the highest profit orders that merchants can get, so being able to accept them will greatly increase the profit margin of many merchants.
Bitcoin's anti-fraud attribute extends even to the physical world of retail stores and shoppers.
For example, for Bitcoin, a huge hacker who recently stole 70 million consumer credit card information from the Target department store chain is not possible.
How this works: you fill up your shopping cart as you do now and go to the checkout counter.
But instead of handing over your credit card payment, you take out your smartphone and take a snapshot of the QR code displayed by the cash register.
The QR code contains all the information needed to send bitcoin to Target, including the amount.
You click "confirm" on your mobile phone to complete the transaction (
If you don't have bitcoin, including converting the dollar in your account to Bitcoin).
Target is happy because it has money in the form of bitcoin, it can instantly turn into dollars if it wants, and it doesn't pay or very low fees for payment;
You are happy because there is no way for hackers to steal any of your personal information;
Unhappy with organized crime(
Okay, maybe the criminals are still happy: they can steal money directly from bad places
Secure commercial computer systems.
But even if they succeed, consumers will not take the risk of loss, fraud or identity theft. )
Finally, I want to talk about some of the critics who say that bitcoin is a paradise for bad behavior, and criminals and terrorists can transfer money anonymously without punishment.
This is a myth, mainly caused by sensational news reports and incomplete understanding of technology.
Like email, bitcoin is anonymous, not anonymous.
In addition, each transaction in the bitcoin network is tracked and always recorded in the bitcoin blockchain, which is a permanent record that everyone can see.
So for law enforcement, bitcoin is easier to track than cash, gold or diamonds.
What is the future of Bitcoin?
Bitcoin is a classic network effect, a cycle of positive feedback.
The more people use Bitcoin, the more valuable people use bitcoin, and the higher the motivation for the next user to start using Bitcoin.
Bitcoin shares this network-effect attribute with popular Internet services such as telephone systems, networks, and eBay and Facebook.
In fact, Bitcoin is a four.
Double-sided network effect.
For their own reasons, there are four constituencies involved in expanding the value of Bitcoin
Interested participation
These constituencies are (1)
Consumers who pay in Bitcoin ,(2)
Merchants that accept bitcoin ,(3)
"Miners" running computers that process and verify all transactions and make distributed trust networks present, and (4)
Developers and entrepreneurs who use bitcoin and develop new products and services on top of Bitcoin.
All four aspects of the network effect play a valuable role in expanding the value of the entire system, but the fourth aspect is particularly important.
In Silicon Valley and around the world, thousands of programmers are using Bitcoin as a 10 thousand flower barrel to showcase new products and service concepts that were previously impossible.
At our venture capital firm, Anderson Horowitz, we see more and more outstanding entrepreneurs with a highly respected record in the financial industry, building companies on top of Bitcoin.
For this reason alone, Bitcoin's new challenger faces a difficult battle.
If bitcoin is to be replaced now, there must be considerable improvement and it must be implemented quickly.
Otherwise, this network effect will dominate bitcoin.
An obvious and huge area of Bitcoin
The foundation of innovation is international remittance.
Every day, hundreds of millions of low
According to the World Bank, high-income people go abroad for hard work and earn money to send back their families, totaling more than $400 billion a year.
Banks and payment companies are thinking every day.
The cost of sending the money is up to £ 10%, sometimes even higher.
Therefore, the transfer to bitcoin to pay for these remittances, which are not charged or very low, will greatly improve the quality of life of migrant workers and their families.
In fact, it is hard to think of anything that will have a faster and more positive impact on many of the world's poorest countries.
In addition, bitcoin can often be a powerful force to bring more people in the world into the modern economic system.
Only about 20 countries around the world have the banking and payment systems that we think are completely modern;
There is also a long way to go about 175 kilometers.
Therefore, many people in many countries are excluded from the products and services that we Westerners take for granted.
Even the fully virtual service Netflix is only available in about 40 countries.
Bitcoin, as a global payment system that anyone can use anytime, anywhere, can be a powerful catalyst to extend the benefits of modern economic systems to almost everyone on Earth.
Even here in the United States
The accepted problem is that the cost of "not deposited in the bank" is very high --
People who do not have a traditional bank account even pay for basic financial services.
Bitcoin can solve this problem directly by making it easy to provide extremely low prices.
Offering fee services to people outside the traditional financial system.
The third interesting use case for Bitcoin is micro-payment or ultra-small payment.
Although it has been tried for 20 years, small payments are never feasible because small payments are not cost-effective (
$1 and below, one of a few cents per penny or penny)
Through the existing credit/lending and banking system.
The charging structure of these systems makes this practice not feasible.
All of a sudden, with Bitcoin, it's simple.
Bitcoin has a beautiful feature of infinite division: currently eight digits after the decimal point, but more in the future.
So you can specify any small amount of money like a penny and send it to anyone in the world for free or almost freefree.
Consider monetization of content, for example.
One reason why media companies such as newspapers have difficulty charging for content is that they either need to charge for all content (
Pay full subscription fee for all content)or nothing (
This leads to the terrible banner ads everywhere on the Internet).
All of a sudden, with Bitcoin, there is an economical and feasible way, any small amount or each archive access can be charged per article, per section, per hour or per video playback, or per news alert.
Another potential use of Bitcoin micropayments is to crack down on spam.
Future email systems and social networks may refuse to accept incoming messages unless they come with a small number of bitcoins that are small enough not to matter to the sender, but large enough, who can send billions of spam free of charge today without penalty.
Finally, the fourth interesting use case is public payment.
I noticed this idea for the first time in a news article a few months ago.
A randomly watched audience at a TV sporting event held a placard with a QR code that said, "Send me bitcoin!
"He received $25,000 in Bitcoin in the first 24 hours, all of which were people he had never seen before.
This is the first time in history that you can see someone holding a sign in person or on TV or on a photo, and then click twice on a smartphone to send them money: take a photo of the QR code on the sign, send money by clicking.
Think about the impact on the protest movement.
Today, protesters want to be on TV so people can get to know their cause.
Tomorrow, they will want to be on TV, because that's how they raise money, and they will hold the sign and let the people who sympathize with them anywhere in the world send them money on the spot.
Bitcoin is a financial technology dream come true, even the toughest anti-capitalist political organizer.
The next few years will be a dramatic and exciting period around this new technology.
Some well-known economists, for example, are deeply suspicious of Bitcoin, even if Ben.
Former Federal Reserve Chairman Ben Bernanke recently wrote that digital currencies like Bitcoin "may hold for a long time --
Especially if they promote faster, safer and more efficient payment systems.
In 1999, legendary economist Milton Friedman said: "One thing is missing, but it will be developed soon.
Cash, a way, on the Internet, you can transfer funds from a to B without knowing B or B, just like I can give you a $20 bill, you may understand this without knowing who I am.
"The Economist who attacked bitcoin today may be correct, but I am with Ben and Milton.
In addition, there is no shortage of regulatory themes and issues that must be addressed, because there is hardly a country's banking and payment regulatory framework that expects technologies like Bitcoin.
But I hope I have given you great hope for Bitcoin.
Bitcoin is by no means just a libertarian fairy tale, nor is it just a simple Silicon Valley hype that offers a comprehensive opportunity, it is possible to re-imagine how the financial system works in the Internet age and a catalyst to reshape the system in a way that is more powerful for both individuals and businesses.
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