Satoshi Nakamoto envisioned a world where trust was not put into humans anymore, but into mathematics. This easy to understand idea led him to create the Bitcoin network, that is a new type of money. But before analyzing what is good about Bitcoin, we have to understand what we did wrong in the past.
Going back ten thousand years we know that early people used beads and seashells as money. But where could they safe keep their money? They wore their money on their body as necklaces or bracelets. It was the easiest way to make sure the money was theirs. Someone would have to kill a person in order to steal that money, but everybody would see it and would excommunicate the killer from the tribe because he was not trustworthy.
Going forward to the coinage period we see the use of precious metals as money. People would start to mint the precious metals in the form of coins, or as jewellery. The money is kept safest again on the body. But as the businesses would develop, it was harder and harder to store all the coins or jewelries. This is the biggest flaw of using gold as money. The risk of being robbed or killed at home was too high. This is how the first banks appeared, and where all the problems started.
Generations have passed and we have had hardwired the role of the banks in our view of the world. We believe it is safe to store our wealth in a bank because they guarantee the safekeeping. What few people understand is the role of the Central Banks. They print money in a society, money that never existed before. But they can do this because we gave them the power of governing our money, or what we agreed to name money. This great power of printing money has also given them the ability of stealing a little bit of value from our stored wealth each time a banknote is printed or typed on a keyboard. The inflation reduces the purchasing power of each dollar we hold. Each percent is slowly devaluing our money and it’s sometimes difficult to see it, but on a long enough time scale the compound effect is obvious. This would not have been possible when we wore our money on a necklace or a bracelet, be it beads, seashells or gold.
Bitcoin created the best hard money that we ever had. But in order for Bitcoin to succeed, people have to give up trusting other entities with the power to decide what money is. The Schelling point for money exists. Some think it is finally Bitcoin. But whichever that point is, WE have to decide this, and not let others decide for us. Slowly people will understand the game theory of wearing the money on their body. A bitcoin full node is like the necklace that everybody else sees. Is the string that holds the money for us in place. It’s our projection to the world for what we believe money is. It’s out way of pointing towards the Schelling point of Bitcoin!
Bitcoin network is running on many computers around the world using the implementation that best describes Bitcoin. The problem is people run full nodes but do not use them. Using them means actually verifying that the bitcoins one receives are confirmed by his personal full node, and by doing this you’re enforcing the rules of the network. In case there is an update or a bug, people that do not USE the node, will not feel the pressure to update their devices. That node would become a zombie node that does more harm than good. A full node has to be used and maintained.
People that do not USE their full node give power to someone else to decide what money is. So this is the responsibility and sovereignty that Bitcoin brings, where we have to deploy and run our own full nodes and verify our transactions with them. It’s the very reason that keeps the checks and balances of the Bitcoin network and makes it difficult to change.
If there were no full nodes, there would be no 21 million coins limit.
Don’t trust
Verify!
