Friday, July 30, 2021

Bitcoin Understood - Finally

 In the time since Bitcoin was introduced I have heard a lot of interviews with pundits, technicians, analysts and political scientists - to name a few - about what Bitcoin is.

I can't tell you how many presentations on blockchain I have endured.

I'm technically knowledgeable enough to understand that blockchain is a complicated, computer cycle intensive process that somehow produces value in the form of the Bitcoin crypto currency.

But have never gotten the link between computer cycles and currency.

And why the value of each "coin" keeps going up has been nothing short of alchemy in my view of the world.

Every presentation I have ever heard has involved an amazing number of words, none of which, for me, had any tangible, understandable meaning (knowing that a computer array somewhere is frantically wasting electricity didn't give me the key to the door of understanding this mysterious new hype).

Today one of the news guys on the BBC in few words explained it to me.

"Solve immensely complex puzzles and get awarded bitcoin".


I understand that.

And that made one other thing that I knew about Bitcoin suddenly tie into the whole concept.

I knew that at the outset there was a set number, never to be increased, number of "coins".

I just never knew what that had to do with anything.

Now I understand: that finite number of coins means that, as they get awarded for people solving puzzles, they get to be worth more; and as the puzzle solving goes on they get more valuable as their supply dwindles.

I'm not clear on when the supply reaches zero and the puzzle solving continues what happens.

Maybe there is a secondary market for already awarded coins?

But I was happy to get this far with understanding.

Personally I prefer beaver pelts.

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