Money, Bitcoin, and Blockchain
Humans used many forms of money throughout history, such as seashells, livestock, cacao beans, salt, gold, silver, and paper notes. However, the technology invention of Blockchain made it possible to create the first digital coin: Bitcoin. So what is Bitcoin, and the role of Blockchain?
Jean-Luc Verhelst is a Bitcoin & Blockchain author, trainer, and adviser. He is also a global public speaker. Jean-Luc wrote the book Bitcoin, the Blockchain and Beyond (2017). It is a 360-degree onboarding guide to the future of money and Blockchain.
Before his current position, Jean-Luc worked several years as a strategy consultant, and became the blockchain leader for Deloitte Belgium after spending several months at the EMEA Blockchain Lab. In 2021, Jean-Luc was a speaker at the Virtual Data Innovation Summit webcast ‘FinTech AI Adoption & Benefits,’ where he presented: Blockchain-based tokens: a new asset class? Jean-Luc: “They say that a Google search can change your life. That was the case for me back in 2011 when I discovered Bitcoin.”
Money is the value people attach to something, e.g., US Dollar. Three features characterize it: a medium of exchange for goods and services, a unit of account, and enabling you to store value over time. Currency is a form of money and is often issued by and linked to countries. Additionally, there are also other types of currencies like private- and digital currencies.
The difference between currency and money is threefold: a currency is not storing value over an extended timeframe, is unbacked by any physical asset, and last but not least exposed to inflation. Besides, a currency must be portable, acceptable, durable, recognizable, fungible, divisible, and scarce to be successful. US Dollars, Euros, and Renminbi fall under the definition of currencies. “Though Bitcoin has long been considered a digital currency and not money, it is becoming more and more a store of value for individuals and businesses,” says Jean-Luc.
What is Bitcoin? Jean-Luc explains: “Bitcoin is the Internet’s first distributed digital currency. It is fully decentralized, meaning that no central organization is controlling it. That makes it different from fiat currency such as the US Dollar regulated by the Federal Reserve.” In other words, Bitcoin is a digital coin used as digital cash on the Internet. You can transfer Bitcoin to someone else without a third party like a bank”.
With technologies like artificial intelligence, the Internet of things, and mobile Internet, Blockchain – the platform underpinning Bitcoin – is one of the greatest advents of the Internet.
The Bitcoin Blockchain is a collection of records in a shared account ledger keeping track of Bitcoin ownership. It shows who owns the bitcoins at a certain point in time. The ledger is distributed across the network. Jean-Luc: “An essential benefit of a distributed ledger is that the data contained within the Blockchain is not stored and managed by a third party or intermediary that you have to trust. Instead, the entire network of Bitcoin participants collectively maintains the Blockchain. Anyone can connect a computer or device to the Blockchain and run a full node storing and maintaining the Bitcoin Blockchain“.
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