Bay area 2013: It was a sunny Friday afternoon, I was heading out to grab some lunch with my office colleagues while having a casual chat. On our way to the restaurant, one of my colleagues introduced me to Bitcoin cryptocurrency and that was the time BTC was trading around at $200.
What really amazed me was blockchain protocol and Bitcoin features like Anonymity, Security, faster transaction, decentralized nature.
Today when I see the fluctuating price of the bitcoins, I thought of taking a moment of pause and to look back at the journey of the bitcoin.
Over last 5 years, the value of bitcoin has grown astronomically. It has become a household name in many parts of the world. People know, talk and even invest in bitcoin. That's the fun stuff which everybody knows. But do you know what the Original Bitcoin was?
Let's look at the other side of the coin which otherwise is never spoken of. Let us take a deep down on What Satoshi Nakamoto vision of Bitcoin was and what it has become now. Even before I elaborate further here is teaser for you from official Bitcoin site
Anonymity
One of the stellar features of the Bitcoin was anonymity, meaning you can send it to anyone without leaving a trace of your identity. This may be still true for those who are earning bitcoin via mining. However, if you are buying through bitcoin exchanges which most of us do then you are not only revealing your identity but also your financial details. Thus making bitcoin’s most important feature of Anonymity, the biggest joke!
Lower transaction Fee
Back in early days when I was exterminating with blockchain protocol, I had hand code some bitcoin transaction submitted to blockchain network.One such submitted transaction is below
https://blockexplorer.com/address/1opUNvgFHmQF14WpLiY1eZD2QXwqumk6t
If you look at the transaction fee I had paid then, it was 0.0001 BTC which is close to now $1. To speak in layman terms, imagine you are buying a coffee of $3 and paying 1$ as the transaction fee, which is higher than what you pay for your credit card transactions.
Matter of fact, even the official bitcoin site (www.bitcoin.org) has removed the term “low processing fee”. This itself tells you the whole story.
Fast peer to peer transaction
According to blockchain protocol, every ten min a new block is confirmed (Block is set of randomly grouped unconfirmed transactions). So it is fair to assume your transaction will be confirmed by the network in roughly 10-15 minutes
Below is the snapshot of the projected estimated time taken for the confirmation of the transaction now and then :
And there we go, another core value bites the dust.
Decentralization
Decentralization is the core foundation of bitcoin. It still holds true till date, however, there is a subtle centralization happening. With the majority of mining pools controlling the mining, the day is not far when a bunch of mining pools will be dictating the terms of the entire network.
Fake Bitcoins
You might be a proud owner of bitcoins which you bought through popular exchanges. But are you sure they sold you real bitcoins? So, when you buy from the bitcoin exchanges, most of them do not sell you the real bitcoin.
Although they will show you the balance of the said BTC against your address or in your wallet, this balance is only valid on the said exchange and not on the entire network.
You can check your address balance here
https://blockexplorer.com/address/{Your address here }
In simple words, they give you credits equivalent to bitcoin and not real bitcoin. Not to mention they are neither anonymous nor decentralize!
My Take
My personal take is that blockchain and cryptocurrencies are here to stay. It is very debatable on what will be the true value of bitcoin (or any other Cryptocurrency) in the near future. It could be $100 or $1 million USD in 2020 and only time will tell how lucky you get!
However one thing is very clear, the fundamental principles on which the bitcoins is based on, are torn to pieces. Unless the bitcoin community restores its original flavour we will only see a karmic cycle of mini bubbles where one person similes to bank whereas another sheds the tears of blood.
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