My boss recently sent me a YouTube video of an interview of Mike Novogratz an investor in Fortress Investment Group and ranked billionaire by Forbes in 2007 and 2008. In the video he talks about his regular investments and how he had heard about Bitcoin and decided to invest in cryptocurrency. At first, he just wanted to be part of this new form of investment but wasn’t very sure about it. He struggled with understanding how the crypto world worked and at some point, thought of cashing out. He reached out to a friend who worked in the Ethereum project since the beginning, in this meeting he realized that Bitcoin was more than just the creation of a new currency but a new concept that was going to revolutionize everything.
Watching this interview made me realize the complexity that still exists in the cryptocurrency world. If cryptocurrency is complex for a guy who has been investing for most of his life in different assets within the traditional system and has a degree economics, then I can imagine it’s even more complex for someone who has never invested in anything to convert into this type of investment or trading.
For many, Blockchain is another revolution in history and it is just starting. Thus, jumping into cryptocurrency is more than just about money, sure at first many stepped in because it is very attractive money wise. For sure what’s mostly interesting about cryptocurrency is the decentralized technology which it is based on. This technology runs on a decentralized network and eliminates the third party.
So, what does it mean to cut down the third party?
I believe this point in particular is the most important and the most revolutionary. Bitcoin introduced to the world a new currency and a new way to interact with your money. It´s technology has brought a spectrum of possibilities and has people betting on the future on how things will run worldwide.
According to Openbazar, “Decentralization is a concept in politics, business, technology, and other fields. In a nutshell, it means a central authority doesn’t have control over a system, but control is distributed among the participants in the system”. Thus, the system regulates its self. I must admit this is scary because humans have the ability to corrupt systems. I believe this is my main concern about this new technology. Nowadays the world runs on centralized systems and they run practically everything. Corruption and conflict of interest has many institutions collapsing and managed to lose the complete trust from users. Unfortunately, we seem to have been stuck in this system because of limited options. For example, there are many people that are unhappy with the current banking system but other than being unhappy there is not much that has been done.
Openbazar: “Decentralization avoids the abuse of power from central authorities. However, this comes at the cost of every participant taking on some responsibility themselves. When we speak about OpenBazaar being decentralized, we are specifically referring to the architecture of the network itself. There is no central point of control in OpenBazaar, unlike Amazon or eBay. All participants in the network have equal power and can’t be forced by anyone else to do anything. This is radically different from the standard centralized model of ecommerce, and it has both costs and benefits”. Even though networks can be built in a decentralized manner, there has been allegations of tampering in the early stages of Bitcoin and Blockchain, for example with Initial Coin Offerings and crypto coin Tether linked to Bitcoin´s price inflation in 2017. So, aside from coming up with brilliant networks that genuinely give people different lifestyle options, it’s also a change in mentality and hopefully Blockchain and decentralization will not be corrupted like many other centralized institutions.
Hope you enjoyed it, feel free to comment.