The Alleynian 706 2018

SCIENCE & TECHNOLOGY

Before long, I had built a small computer system dedicated to processing Bitcoin transactions all day and all night

M y years on the Bitcoin rollercoaster have been exciting, to say the least. But before we get ahead of ourselves, what exactly is Bitcoin? Fundamentally, it is a democratic, open, unconstrained network of computers spanning the globe, allowing individuals to exchange money freely and fairly. Each computer is individually insignificant, yet together they offer an incredibly useful service: free financial exchange between people, without fear of government corruption, excessive inflation, or insiders cheating the system. You might ask why we need Bitcoin. Well, when we utilise our current financial system, we are in the hands of banks. This system might be assumed to act with good will, but with the volatility of the current political climate, just ten years after a financial crisis fuelled by ineptitude, we cannot make this assumption. Although we are relatively safe in the UK, half of the world’s population is affected by poverty today, due to corrupt financial systems. For the first time ever, technology, in the shape of Bitcoin, offers reassurance to these people. Let’s look at a simple example. If Alice wants to pay Bob £10, she asks her bank to subtract £10 from her account and add £10 to Bob’s account. The bank verifies that Alice has £10 in her account, and if so, it adds the transaction to their ledger. The same thing happens with Bitcoin, but the bank — a central point of failure — is replaced by thousands of computers around the world. If a bad actor tries to send money they don’t have, the majority of computers will reject the transaction and consensus will be that it is invalid.

The only way for the bad actor to beat the system and switch consensus in their favour would be to gather more computing power than the entire rest of the network, which is not realistically possible: there is no incentive to do so, as success would not only cost billions, but also drive the price to zero and render any gain meaningless. Instead of trusting one entity, you simply trust that the majority of the network is good. And just as we don’t need to understand TCP/IP and HTML to use the Internet, we do not need to understand all the complex cryptography and networking technology in Bitcoin, to exchange with anyone, anywhere, with total freedom. When I first discovered the potential of this technology in 2015, I got in touch with a few hobbyists and cryptographers, and began dedicating my home computer to supporting cryptocurrency networks. Before long, I had built a small computer system dedicated to processing Bitcoin transactions all day and all night. By 2016, I had learned how to build specialised systems, and finally, after moving out into a separate office space, I designed and built a whole computer system, together with a customised cooling system. I have come a long way since I started dabbling in Bitcoin in 2015. Although it has involved risk, this has been a great learning journey, and I’m now excited by the prospect of designers and developers working to create a truly great user-facing experience. The Internet has already revolutionised communication, entertainment, and knowledge. Now for the very first time, it has revolutionised economics.

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