The Ins and outs of Bitcoin: Emerging as the World Faces a Crisis
By: Ahmad Zaenudin - April 9, 2018 Normal reading 4 minutes
Bitcoin was born because people needed alternative currencies after the crisis hit.
Two police officers and a journalist came to the man at his residence. The look on his face looked like a person who lacked sleep. Appearance with dull shirts, old jeans, and white socks without shoes, adds to the man's mystery.
The police asked reporters. "So what do you want to ask?"
Before the reporter answered, another policeman replied "maybe he would think he would have a problem talking to you."
"I don't think it's a problem [...] I want to ask him about Bitcoin. The man we met was Satoshi Nakamoto, "the reporter emphasized.
Leah McGrath Goodman, a journalist who with two policemen came to Nakamoto, finally disapproved. The man they went to was not Nakamoto the creator of Bitcoin. He is only a 64-year-old American citizen of Japanese descent who happens to have the same name. Until now it was not known who Nakamoto really was.
Bitcoin is a popular term and many people talk about it and discuss it in recent years. Based on a paper entitled "Bitcoin: A Peer-to-Peer Electronic Cash System" written by Satoshi Nakamoto, it is a peer-to-peer version of electronic money that allows online payments to be made directly from one party to another without going through financial institutions.
Technically, Bitcoin uses technology called Blockchain. Blockchain decentralizes the database to all the networks it joins with. Data distributed, has been encrypted. When new data is added, all computers involved in the network are obliged to verify data.
Bitcoin, like gold, is obtained in two ways: buying or mining. However, keep in mind, Bitcoin has a number limit. In the system there will only be 21 million Bitcoin in circulation.
In the clarification uploaded by Newsweek, the media that published Goodman's writings on the Bitcoin creator's investigation, they said that it was important for Newsweek to reveal who the figure behind Bitcoin was. This is because crypto currencies are already popular in the community. People who invest in Bitcoin must know the origin of crypto money.
Satoshi Nakamoto, the creator of Bitcoin that Goodman is trying to trace, is estimated to have 980,000 Bitcoin. With the current exchange rate, the ownership is valued at $ 6.65 billion. Referring to CNBC's publication, Nakamoto's total ownership of Bitcoin is equivalent to almost 5 percent of the total Bitcoin totaling 21 million Biitcoin.
This percentage is similar to the ownership of gold owned by the United States. Uncle Sam's country has around 8 thousand tons of gold. This is worth 4.3 percent of the world's total gold.
Nakamoto is considered to have the wealth of Bitcoin like the US has gold, affecting the life and death of the world of Bitcoin. This is a justification for revealing who Nakamoto really is. Beat the privacy aspects that people often echo.
Why does one person or anyone or Nakamoto create Bitcoin?
In the whitepaper released almost a year before Nakamoto released Bitcoin, the reason why Bitcoin was present was the dominance of conventional financial institutions, along with third-party companies, for online transactions. The financial institution that became the mediator was considered Nakamoto to increase transaction costs. The existence of the intermediary ultimately limits the minimum value transactions to be carried out.
However, there is one more reason that is very likely to be the cause of Bitcoin born into the world. The reason is none other than the presence of the global economic crisis that occurred in 2008.
The idea of Bitcoin, in his article entitled "Bitcoin: A Peer-to-Peer Electronic Cash System", was born in November 2008, aka in the midst of a storm of global economic crisis. Meanwhile, in real form, Bitcoin slid into cyberspace right on January 9, 2009. It was the end of the gloomy period of the global economic crisis that lasted between 2007 and 2008. The Directorate of Economic Research and Monetary Policy at Bank Indonesia in its publication entitled "Indonesia's Economic Outlook 2009-2014: Global Financial Crisis and Its Impact on the Indonesian Economy "mentions that the global economic crisis began on August 9, 2007.
BNP Paribas, a bank headquartered in France, said it was unable to disburse US subprime mortgage securities. Subprime mortgage is a term for housing loans that are given to people who have a poor credit track record or have never had credit. This credit is considered risky. There is a lot of money being spent on this credit. In 2002, subprime mortgage distribution in the US reached $ 200 billion, then increased to $ 500 billion in 2005.
Bad loans in the US are starting for the global financial crisis, especially for countries that have trade relations with the US. In 2008, due to the crisis, there was a decline in economic growth, from 2.7 percent in 2007 to 1 percent. In fact, still referring to Bank Indonesia publications, the IMF projected growth to be 1.3 percent.
Specifically, the global economic crisis also caused a slowdown in trade growth. In the previous five years world trade growth reached an average of 8.1 percent. However, the figure immediately dropped to 4.1 percent in 2008.
The economic crisis also caused a decline in the prices of various commodities, including oil. In July 2008 the price of oil per barrel was set at $ 147 per barrel, then dropped to $ 47 per barrel in December 2008.
These economic difficulties make the world of the economy sluggish. The Federal Reserve, the US central bank, even had to reduce lending rates to 0.25 percent at the end of 2008 so that the public would return to take credit.
Another consequence of the global economic crisis is the weakening of the dollar against other currencies. In quarter II-2008, the dollar exchange rate reached Rp. 9,193. The dollar then weakened to Rp8,007 in the third quarter of 2008. This weakening of the dollar is one reason is the loss of public confidence in the dollar, or of the conventional financial system as a whole.
This condition raises crypto money like Bitcoin. The community wants to have another currency as an alternative. Jason Leibowitz, a digital money observer who is also a former Wall Street professional working on the blockchain field at Credit Suisse, once wrote about Bitcoin published by Coindesk, saying that the birth of Bitcoin was a response to concerns that the bank was "too big to fail." Banks that fail, will be the cause of systemic economic destruction. Then Bitcoin was born in response to the question: "where can someone save property if the financial system fails?"
Trust that must be given by money users in conventional financial institutions is also a big problem. This is what is to be answered by the birth of Bitcoin, especially in the context of electronic transactions. Bitcoin was born without creating a financial system that relied on trust, but on evidence. What is meant is cryptographic evidence, evidence that is difficult to be tampered with by people who do not have rights.
Nakamoto, in his writings, considered that this domination even though it was running well enough, still had weaknesses because the model that had been used was based on the trust model.
"What is needed is an electronic payment system based on cryptographic evidence, not trust," Nakamoto said.
The birth of Bitcoin "allows two parties to transact directly with each other without the need for trusted third parties," he said.
In the article by Maria Bustilos published by The New Yorker, it was stated that Nakamoto was indeed clearly motivated to create Bitcoin due to the fall of the world economy. When Bitcoin first launched, the first fifty Bitcoins (or the term "genetic block") contained text from the January 3, 2009 edition of The Times which reported the possibility of a bailout for banks affected by the crisis.
Bythe Masters, Chief Executive Officer of Digital Asset Holdings, a digital asset investment firm, said that Bitcoin was indeed the answer to the economic crisis that hit the world at that time.
"Yes, this is an activist response (on economic conditions). The world will be more efficient if people can directly make direct transactions individually. Currently, when you transfer values, usually in the form of money, you need a trusted institution that is centralized and accountable. this institution is proven by their belief that they do not help with money laundering, terrorism, and you know where to call if the problem is whipped up. That belief does not exist in Bitcoin, but it inspires crypto technology, "he said in an interview with The Wall Street Journal .
The journal, entitled "When is the real problem is money itself!": The Practical Materiality of Bitcoin, written by B. Maurer of the University of California Irvine, reveals that Bitcoin is a currency that combines the practice of materialism with community politics, which is a response to conditions. conventional finance.
That is, Bitcoin wants to shift the value of trust in financial transactions that have been focused on conventional financial institutions on community roles. What is meant by the community role is the fact that Bitcoin, as software, is distributed with the open source concept (Bitcoin code can be downloaded via Github). Everyone, who understands coding, can help improve, improve, and protect Bitcoin.
"In order for Bitcoin to function, one does not have to trust Nakamoto, a bank, or another person or institution. We only have to trust cryptographic codes or algorithms," Maurer said in the journal.
More simply, Maurer said that Bitcoin does not work as a currency, but rather as "solidity, materiality, stability, anonymity, and community."
Also read articles related to BITCOIN or other interesting articles Ahmad Zaenudin
(tirto.id - Technology)
Reporter: Ahmad Zaenudin
Author: Ahmad Zaenudin
Editor: Suhendra
0 Response to "The Ins and outs of Bitcoin: Emerging as the World Faces a Crisis"
Posting Komentar