I want to make things short and less complicated for all of you.
So first, let’s talk about Decentralization
and let’s keep an eye on money trades.
But you can think about any (digital) goods (data ;]) which could have value in the future.
What is Decentralization?
I think you could write a book about this question, but
the key is that all participants in a decentralized network share the same rights and are able to do the same things without compromising others.
What we know until today is centralization, where we need to go to someone who makes our transactions or whatever (paypal, banks,…). Decentralization is about managing all by yourself (or if needed also again by third parties.)
Decentralization’s main advantage:
Third parties will be excluded
(e.g. service providers like payment services)
=) Cost savings through direct trades
=) Increasing efficiency of trades worldwide
=) More money for all: new economic era
That’s what business is dreaming about since Bitcoin’s outbreak.
And we think it could be secure enough to use such a network, but is it really secure enough?
Take a look at my other youtube video:
Bitcoin and Satoshi Nakamoto’s nearly destroyed dreams
The video explains just a small part of the real problem. The big problem is about trust:
While you let the network manage itself, you will never know when there are a lot of bad people around you.
(Or you will know it when it is already too late!)
This is a constant problem in decentralization:
Do you know the term peer-to-peer network?
Blockchain is a peer-to-peer network.
Ever wondered what happened with old peer-to-peer networks before Bitcoin?
I’ll give you three examples and you can look them up if you want:
old Napster (today centralized)
Short version: The good people don’t use it anymore, because there are too much bad people spreading compromised files respective shut it down etc.
The same holds for networks like Bitcoin:
If there are too much bad people, they are able to take over the whole network and can tell everyone what to do next.
Like fake a transaction,
make just transactions from china
or just block other transactions.
It doesn’t matter whether you need computational power, because in the end there will be a cluster with most computational power. (Look at mining pools)
Quantum computing destroys the whole network with computing power, but also in breaking the secret keys.
Have a good time
and see you on another video.
Trumpets in Your Ears by www.wowa.me
Whatever you do you do it on your own.
We can discuss and fix mistakes! Yes, we can improve!
Don’t crack software, buy it! Or stay on free software solutions!
Be nice to each other in the comments.
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