You wouldn’t think that after all this time someone would be asking this question, is Bitcoin spam…but yes.
Clearly, it’s just me… 10 years ago Bitcoin seems like spam to me… Trying to research it again, still feels like spam. No real explanation for the way its “market” works. What am I miss, should I make a mining computer? I feel like if you can’t explain it you don’t understand it, and it seems like no one understands anything and in the IT world that always taught be scam spam spyware adware, etc… what gives… Does anyone have any input?
Okay so let’s start off with markets, how does Bitcoin actually work? Bitcoin functions on something called the Blockchain, the blockchain is basically an open ledger of transactions. For a transaction to be valid, it has to be “mined” this is a very complex mathematical calculation that verifies the transaction in the blockchain.
Bitcoin cannot be made up as we go along. there are only going to be a limited supply of Bitcoin. One day new Bitcoins will no longer be produced any more. They are, like transactions, produced by mining.
- Copies of the blockchain are distributed across hundreds of thousands of computers. No one person holds the rights to it or the data. It is everywhere and nowhere.
- No government or organisation holds any rights or jurisdiction over Bitcoin. Even if they try to make laws or put in restrictions, they cannot control it because they don’t own it, it’s owned by everyone who has bitcoin or mines the blockchain and that’s millions of people.
The Shocking Truth about Fiat (Normal money).
I’m going to talk about the pound for a second. The pound, like the dollar, used to be backed by gold. Now, it’s backed by thin air. Literally, there is as much money in circulation as the Government and Bank of England decide. If they want to they can literally make money out of thin air by printing money. This is called quantitative easing, and it devalues the currency massively. (Sounds a bit scammy).
Also, banks can lend out money and charge interest, much more money than they actually, physically have. That’s why if there is a run on the bank, the bank doesn’t just give out all the money and go, oh dear, we’re out of money. They actually have to have government or other input to keep them afloat.
Interest is also an issue, let’s create a new bank with £5 in it, let’s say 4 people have £1 each and deposit it in the bank, then the bank lends £1 to the fifth person at a rate of 5% interest. Where is the extra money going to come from? There is only £5 in circulation. So on a grander scale of things you can see that interest is actually a problem as to make it function you have to have more money “working” than is in circulation.
So in my view, Bitcion is actually far less of a scam than normal money simply because it is not controlled by people. It’s controlled by mathematics and computers. Normal money is far more spammy than Bitcoin.
As far as markets go, of course, Bitcoin is now completely integrated into the markets. You can trade USD against Bitcoin, GBP against Bitcoin. So since they can’t beat Bitcoin, the markets have joined it.