Disclaimer: This content will go stale quickly, similar to every cryptocurrency article written before it. Just take a look at the first technical book on Bitcoin, “Mastering Bitcoin” by Andreas Antonopoulos, and you dear reader will see is out of date. This is a statement he alludes to in many of his YouTube videos in fact.
So how exactly does this stuff work anyway?
The first concept to grasp here is decentralization.
Let’s use bitcoin as an example since it is the easiest to understand and three are many YouTube videos to watch that explain the process as well.
Decentralization means payments are being
sent using the internet without an intermediary.
When you dear reader use something like Venmo to send a payment, you are using an intermediary to fulfill the transaction.
In the case of Venmo, not only are you using
an intermediary (PayPal owns Venmo), but that particular intermediary interacts with yet another middleman (your bank). This transaction is centralized and explains why scaling a central system is so easy (because you are building another layer on top of a centralized ecosystem).
Let’s take a break for a minute to let that sink in.
Two key items to understand here are:
- No central authority
- Difficult to change because there is no central authority
Take the software Microsoft Office for example: when there is an update, Microsoft sends the update to you. You click on the update link, it installs and you now have the latest version.
In our new decentralized environment, this is not possible. To make any update, every single person on the network must agree to the change, a time consuming process and why changes are so slow. Reaching 100% agreement and implementing a change is not a seamless push function where a data packet update is sent to all computers with the operating system.
Where is this headed?
In the future, all of the various blockchains will need to communicate with one another seamlessly.
Atomic swaps have already been proven to work where you dear reader can exchange Bitcoin for Litecoin as an example (AKA Litecoin could then “piggy back” on Bitcoin’s massive network).
This could potentially be a big breakthrough as we move towards a world where communication between multiple Blockchains is secure and essentially free.
It is our prediction at Crypto Mouse that this will work over the next 15+ years. It is very likely that children born today will not know what a bank is or a world where it costs ~5% to send $100 from the United Kingdom to the United States.
We at Crypto Mouse believe Decentralized Applications will also eventually work, although the majority of the Decentralized Applications being built today will likely be worth nothing.
The easiest way to get involved is to own the payment systems and the protocols.
If you dear reader are a sophisticated investor, with a strong technology background, feel free to research the Decentralized Applications (this is where we at Crypto Mouse are spending our time today).
Keep reading on for high level opinions and ways to make money…