72. Conclusion

72

Conclusion

SATOSHI NAKAMOTO brought together many existing mathematical and software concepts to create Bitcoin. Since then, Bitcoin has been an ongoing experiment, continuing to evolve and be updated on a regular basis. It has, so far, proven its utility and revolutionized the financial and monetary industry, particularly the electronic payment system, and is being accepted worldwide. Bitcoin, in itself, may or may not survive up to the year 2140 when all bitcoins will have been mined, but the idea of a distributed, peer-to-peer and decentralized limited-supply currency is here to stay.

The ability to transfer money digitally has been available only recently in human history but this is merely a mechanistic change in the handling of money, a new way to perform the same action. But gold and silver or any other non-inflatable entity cannot be directly transmitted electronically and thus require a conceptual delegate that might misrepresent their quantity if too many copies were to be made (i.e., this delegate were to be inflated). The greater the quantity of any currency, the less valuable it becomes, and the less, in real goods and services, it is capable of purchasing.

Then, in late 2009, Satoshi introduced Bitcoin. The concept of a decentralized digital currency—open source and with an open accounting book—has been actualized. Interestingly, in contrast to gold and silver, which can only exist in the physical world, bitcoins can only exist in the electronic world.3 Because of that, in essence one can argue that precious metals and Bitcoin complement each other very nicely.

The fact that Bitcoin is an open source software whose transactions must be confirmed by all members of the network and which operates with a public ledger makes it the polar opposite of a centrally controlled, closed currency system. Regardless of whether regulators are involved in a closed system or not, such systems are just as susceptible to corruptions and bribes to government leaders as any other government-controlled institution. As rare, precious metals, gold and silver are an excellent choice to use as money, but their inability to be transferred electronically requires some sort of intermediary, representative form, capable of being manipulated by a third party. Transporting a large sum of gold and silver is also cumbersome and expensive. Precious metals will, however, hold their value in major disruptions such as electric grid blackouts and would certainly become the currency of choice in a Mad Max scenario. For those fearful of such an eventuality, possessing a certain amount of gold and silver is appropriate. In any case, all fiat (i.e., government-decreed) currencies throughout history have always died, and you should not expect your country’s currency to prove an exception to this rule.

This book has presented all the most relevant conversations and discussions in which the creator of Bitcoin was involved. Whether a group or an individual, the person known as Satoshi Nakamoto expressed himself clearly and concisely and naturally understood very well Bitcoin’s foundation. His various writings seem to indicate that he did not expect Bitcoin to take off as rapidly as it has. Satoshi assembled various existing concepts to create this formidable technology currently revolutionizing how a monetary system is conceptualized. He has opened a Pandora’s Box, and many brilliant minds are working beyond Bitcoin to revolutionize other systems based on its precepts.

Whether Bitcoin represents money is subject to debate, but that it is a currency, a medium of exchange, is indisputable. Gold and silver are a store of value over the long term because of their limited supply and their usefulness. Bitcoin also has a limited supply—the 21 million bitcoins planned as of 2140—and has proven so far to be very useful as an easy form of payment over the Internet, its natural medium.

Satoshi covered many of the arguments we have seen debated over and over in the news media since Bitcoin’s rise in popularity. Although we would have loved to hear him discuss them in person, this book gives us the ability to easily revisit the many opinions he shared during his “public life”. Bitcoin’s major impact has been to allow the population of the world to reconsider how a currency should function. It opens the door for humanity to a new monetary system, an electronic renaissance.

Thank you!

3. So far, conveying bitcoins in the physical world implies some form of artifact like a paper wallet with the Bitcoin address and private key inscribed on it. Or alternatively, it requires some trust in a third party, for example the manufacturer of a physical coin with a hidden Bitcoin private key along with a visible Bitcoin address.