Bitcoin for Dummies (Part 2)

Bitcoin Joke

As talked about in my last blog post, Bitcoin is an open source protocol that allows you to transfer value across the world’s most powerful computing network. The beauty of Bitcoin is the fact that it is a fast and stable foundation for which anyone can build applications on top of. Bitcoin allows programmers to design any financial app they wish and integrate it on top of a worldwide protocol that has no borders.

Applications will be able to reach new and untapped markets. Most will probably be mobile based and used all around the world. People will be able to transfer ownership for anything of value over the Blockchain and have this preserved for all to see in a contract like manner. This will be great for stocks and shares, change of ownership of a car or even a house.

The area this will have the biggest effect is in the third world where many people have no access to bank accounts. They will suddenly find themselves a larger part of the global economy and will flourish as a result. Bitcoin simply exists and has no legal jurisdictions or political prejudices. It is not controlled by any central authority. As a result, no government can truly control Bitcoin and slow its adoption for their gains. People will eventually find Bitcoin to be a secure store of value, much like gold today but with the added convenience of portability and also the bonus of being able to use it without borders.

You can simply move to another country and have access to your Bitcoin wallet by accessing it online or storing your bitcoin in other non-physical manners. Bitcoin will be used by many from individuals to businesses. The advantage for businesses is the fact they can send a payment of any size for mere pennies. And they will be safe in the knowledge that it was transferred in only minutes. Unlike cheques or other methods used by banks which can often take up to a week if transferring large amounts.

The final point I want to raise is that you are in essence your own bank. You simply download a Bitcoin wallet and then transfer and send value at will 24/7 around the world. This is going to open the doors for many possibilities in the future. Bitcoin is still young and not many killer applications have been designed for Bitcoin yet, but this shall change over the coming years. One recent application worthy of mention is Changetip which allows you to tip anyone, any value you desire for their online content.

We are seeing more and more value being placed on digital services and Bitcoin fits in well with this. We are also seeing the world become a more mobile place where people can work where they please and have technology as their tool of trade to create new businesses, services and content. Again Bitcoin will fit in well, because it is a currency and protocol with no boundaries much like the internet today. Bitcoin will allow us all more freedom and less control from those in central authorities and as a result we will see more human innovation which can only be a good thing!

(Photo by Sean MacEntee)

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