It would be impossible to talk about the importance of Bitcoin without talking about concepts of neutrality, decentralization, privacy, and banking. Those concepts lie at heart of modern financial systems and those are the same things that make Bitcoin so special.
Banking has become one of the most important institutions of our time. It is central to our financial system – the key third party for money related operations. It is practically impossible to move money without them. Long story short, they control the money of today.
However, banks were great liberators once – they moved finance from realm of kings to the realm of everyday people. They made finances available for billions of people. However, it then got concentrated, it grew in power which led to corruption. Today banks are no longer a liberating power.
It’s important to understand that bankers themselves are not different from everyday people – they work hard, support their families, make money, keep a steady job and etc. It’s the architecture of banking that creates problems. It is designed to be restrictive in this age.
Since the 1970s the currencies began to be digital – money was no longer restricted to paper, it has become numbers in ledgers and computer systems. This created a dream for the governments around the world that one day they might control every financial transaction that takes place in the world. A perfect prerequisite for a totalitarian rule. You can open an account electronically and within 24 hours you can start trading on any stock market of your choosing. All you have to sacrifice is your privacy and freedom.
This system makes you completely dependable on it and if one day it sees fit to cut you off from the financial world – it can do it with frightening ease. Also, every individual transaction you make is cataloged and analyzed. Practically speaking, the right to not be surveilled (aka Privacy) is completely ignored.
However, the dream of nation states to create a totalitarian financial system died with the invention of Bitcoin.
People have a misconception that power of the internet comes from its ability to quickly transmit information. In reality, its power comes from Net neutrality. It is a concept, that the internet does not discriminate based on source, destination or content.
Bitcoin also works on the same concept – the network doesn’t care about the source, destination, the number of coins. Did you pay the sufficient fee to use the network resources? If yes, your application is valuable.
We have already discussed the lack of privacy in the current system and the ability of the power to cut you off from world finances. This is a modern-day censorship. Luckily, Bitcoin is very different. You cannot control where money is transmitted because bitcoin is not attached to identities or geography. Surveillance of everyone is impossible in Bitcoin. The fact that the network is neutral makes Bitcoin censorship-resistant.
The ability to transact across borders means that through Bitcoin financial world will be expanded to billions of people who don’t have access to modern day banking. But, even the least developed and poorest countries have cell-phone towers and some form of electricity. Billions of people in the poorest countries have cell-phones and each and every one of those cell-phones can be turned into a bank. This bank is completely encrypted and only its owner has access to it.
This is a major disruption for the current financial institutions.
In a network-centric world, currencies like Bitcoin evolve, like species, based on the stimulus they have from the environment. However, the process of evolution is much faster than in species. Evolution is often hastened by the attacks of the powerful institutions which guard the current financial system. To their disappointment, attacks make currencies more resilient.
The governments are already trying to regulate or even ban Bitcoin, but it keeps getting stronger. Every now and then, we hear stories that Bitcoin is dead or dying, however, it still lives. People see this and after all those false predictions they start to think, “This thing really tends to survive”. It’s actually a perfect marketing for Bitcoin because all it has to do is to survive. So far, it’s doing great.