On Day 1 of the London Blockchain Conference, Kevin Healy, a specialist content creator for the BSV Blockchain Association, presented the fundamentals of Bitcoin and the economics that drive it. Dispelling many pervasive myths about Bitcoin, Healy took it back to basics to explain what the protocol is all about.
Common misunderstandings about Bitcoin
In the early days, people who misunderstood Bitcoin thought it could enable them to commit crimes with impunity. However, when the Silk Road was taken down, that narrative was exposed for its lie and soon shifted to digital gold.
Neither is true; Bitcoin is a protocol designed to enable small, casual transactions, as Satoshi Nakamoto repeatedly said. This is why the BSV blockchain is the only blockchain that is aligned with the original vision.
Small – Healy points out that, by eliminating the need for trusted third parties, Bitcoin enables smaller transactions than were previously possible. Credit card companies charge $0.10 + 2% to cover their overheads and make a profit, making it economically infeasible to have transactions smaller than $0.10. Bitcoin changed that, making it possible to make sub-penny payments for the first time.
What sort of things might these tiny payments be used for? Paying per packet when using the internet, accessing articles behind paywalls, and much more. It can potentially change the subscription model to something based on paying only for what you use.
Casual – Third parties like credit card companies also collect information such as a person’s billing address each time they process a transaction. This isn’t suitable for casual transactions, e.g., buying access to an article online or making an in-game payment. Bitcoin transactions do not require the same information collection and gathering. They allow for private, casual transactions that are irreversible.
Of course, KYC laws kick in at certain thresholds, and Bitcoins can be recovered if stolen, but for the purposes of small payments, they are irreversible. There’s nobody you can call to ask them to reverse the transaction—they work just like cash.
Transactions – While cash transactions and payments are the most obvious type of transaction that might occur on Bitcoin, many others are possible. For example, data exchanges are possible, thanks to the various OPCODES Satoshi built into Bitcoin.
Associating data with transactions enables all sorts of interesting use cases, such as creating access tokens, minting non-fungible tokens (NFTs) to prove the authenticity of luxury goods, tracking products through a supply line, and much more.
Yes, Bitcoin is an electronic cash system, but it’s much more than that, and it can enable virtually every type of transaction imaginable. Finally, people are beginning to realize this and use Bitcoin for its intended purpose!
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