24 September 2013

So, What Is Bitcoin?

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In the post where I detail My Stance On Bitcoin. I said I had a problem with the overly simplistic or overly complicated and now canned ways the question to What is Bitcoin gets answered. Here I will detail why and my own way to answering that.
  • 1.- Because many answer that question only focusing in it being a digital currency.
  • 2.- Because many answer that question focused in highlighting the peer to peer nature and base of it obviating the reiteration on it being a digital currency.
  • 3.-Because many answer that question with a personal politics agenda tint that dilutes what is being answered.
  • 4.-Because many answer that question diving into metal making the answer hard to understand clearly for as much people as possible.
For anyone that has been following Bitcoin the past few months since it reached a mainstream buzz or longer. These descriptions should hit the mark.

So, What Is Bitcoin?

It is a Economic System and Monetary technology. That can be perceived in 5 different ways, all of them correct and that are part of the whole of it:

1.-It is a Digital Currency.

Bitcoin is a digital currency because it can be used as an unit of account in reflection to traditional ones and exchanged in for value in the same way you would use cash money in real life. Just with electronically enabled conventions of use.

2.- It is a Digital Commodity.

Bitcoin is a digital commodity because its units of account where value gets stored are scarce in a deflationary manner because of the way new bitcoins get into circulation. That involves mining-alike work and investment and because there is an exact predefined and finite number of them known in advance to the point where its discovery follows a predictable timeline.

3.-It is an innovative Info Network Design Architecture.

Bitcoin  can exist and it is exciting  thanks to the way its network works. Its Protocol. That is in a decentralized peer-to-peer computing cloud nature. Based on the balancing of the inherent and inhuman distrust managed by the cryptography flowing through it and the inferred human trust needed that evocates and powers its economic perceived value.

4.-It is a Platform.

Bitcoin is a platform because things can be build from it, for it, with it that in turn get to be connected to it. Any platform main principle is to be utilitarian in order to facilitate goals, projects and innovation. Bitcoin is then and can correctly be seen as a platform. Because it is.

5.-It is a Payment System.

Bitcoin is a Payment System thanks to the 4 previous things it also is and got going for it. And because it can be exchanged to any FIAT currency.

Wait, But how you are going to articulate all of that in a simple phrase?

You don`t. You only say it like this in a layman way that allows you to go layers in as you get asked more:
Bitcoin is an Economic System and Monetary Technology and Platform that allow you to use it as a Currency, Commodity and Payment System. Thanks to the way it is designed.
All of it is true. Yet there are no details. It is generic, yet an intriguing answer as a single phrase. If more information is asked then you can break it down in the 5 parts. It will still don`t answer everything because that is impossible to do simple. But it allows to lay out the gist of it. Which is all is needed unless you really want to go academic on it. Which is futile unless whoever asked wants to know more or cares to know it all.

What is the point of having the answer to what Bitcoin is laid out like that?

What is missing from it: It is not overly technical, there are no super complex terms or ¨overly compressed¨ concepts, long explanations to give and it is not infused with any kind of political tint.
Yet it is true, it is accurate.
Whether anyone else agrees with me or if you agree on that is actually irrelevant. It all can stand on its own. It will even apply to not just Bitcoin. But Cryptocurrencies modeled after it.

Ok, But what about fuller answers?

I think the full answers are already out in The Original Bitcoin Academic Paper, Bitcoin.org, The Bitcoin Wiki, and even The G+ Bitcoin Community I happen to run. As fuller answers need more involvement and engagement with a lot of info, concepts, etc. And depending who is asking or who is telling, it may not be needed or It may be overkill.

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