"What is Bitcoin and why is it so important?"

What is Bitcoin?

Bitcoin is the world’s first cryptocurrency, and it works because of the world’s first public blockchain network.

What does it do?

It allows you to send and receive value to and from anyone in the world using nothing more than a computer and an internet connection.

Why is it revolutionary?

Unlike traditional money transfer systems, Bitcoin operates without needing to trust a middleman. Since there's no corporation or intermediary involved, Bitcoin is the first public digital payment infrastructure. By public, I mean it’s available to everyone and not owned by any single entity.

Now that the world has a public infrastructure for information through websites or email, known as the internet, Bitcoin and other cryptocurrencies represent a similar public infrastructure for transferring value. Crypto assets represent an ownership stake in an underlying network. Essentially, the project of cryptocurrency is all about owning these networks.

Crypto is still a fundamentally new concept that will take more time to perfect. Some people think of it as a record-keeping system, where users are paid in Bitcoin to validate the records. Every day and moment, there’s a new set of records being created, and this process is self-enforcing. It cannot easily be overridden by an outside or central authority. So, with Bitcoin, you have a new kind of money, an investment asset, and essentially, a new kind of computer system.

When speaking with people who are deeply involved in the crypto space, I sometimes feel skeptical. They have bold, grand plans, but I’m not convinced they’ve fully thought through how to implement them. Yet, when I talk to them, I also feel bullish about the potential of crypto. There’s a lot of promise in the ideas, but I don’t think we fully understand how useful crypto will be yet.

Why are some people skeptical of crypto?

Criminal use: Nowadays, criminals often use crypto for illegal transactions, such as ransom payments. Since transactions on the blockchain are irreversible, if your money is stolen, you can't get it back.

Energy consumption: Bitcoin, in its current form, consumes a significant amount of energy. Powerful computers solve complex cryptographic problems to validate transactions, and this energy usage can harm the environment through carbon emissions.

Unfulfilled promises: Another reason for skepticism is that many of the promised benefits, like making banking, finance, and lending cheaper, haven’t yet materialized. Some wonder if these dreams are attainable any time soon.

The Future of Crypto

Imagine if the internet becomes its economy, with its own set of rules, operating on a global scale. This new economy would require its systems of record-keeping, property rights, and transaction processing. Crypto could be the best solution we have for this future economy.

If that happens, many believe that by sending a simple message, you could lend money to farmers in Kenya, making the world more interconnected. Some call this the "metaverse," while others might call it the "expanded internet," where we would own more things online. With secure property rights validated by blockchain, new investment assets, and easier, cheaper movement of resources around the world, this future is speculative, but it’s an attainable possibility.