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It is almost 2019
In this point of history, you already know
what Bitcoins are
If you interpret them as virtual magical coins
with no application in the real world
or some real value,
I've got some news
In 2008, an article so called
"Bitcoin: A Peer-to-Peer Electronic Cash System"
was published anonymously by a guy called Satoshi Nakamoto
whose identity is still a mystery
At that time, almost all the trading on internet was made
through financial institutions
that worked as a reliable plataform
to mediate the payments
This works because of the trust we have in the institutions
and pratically, all the commerce in the modern world
- and that includes the internet -
is done that way until today
In your Netflix subscription, you probably used a credit card
that goes through verification in a financial institution
that is probably your bank
But things don't work like that without a reason
Imagine the horror if everytime we bought something on the internet
we would have to go online,
and determine with the seller a different kind of payment
Sir, how much is that Netflix subscription?
30 reais
Ok, can I pay with this druid level 120 in World of Warcraft?
Of course not!
I just accept paladins!
But this financial system, although functional for most cases,
has some problems
Firstly, the transaction costs is bigger than a product or a service costs
In other words, a purchase you make with your credit card
involves a financial institution, that in this case, is possibly the bank,
the bank's employees and the store's employees
That is just to make it simple
Since the employees' food that work in this field
doesn't appear magically in their table,
they need a salary
and you pay that with taxes, fees and interests
So, the 25 reais that you'd pay for a service, is now 30
Reminding you that these values were made up because it's just an example
Bitcoins can solve that by using a peer-to-peer financial system
If you need to get a product or a service, it's ok,
just send the money directly to the seller
Therefore, you eliminate the need of employees, banks and related costs
Ok, there is a small mininig fee of the Bitcoin net
but it is so small that it's fair to say that its transaction price
is practically the same 25 reais from before
And the second problem of our current financial system based on trust,
is that most of the payments are reversible
With Bitcoin, there's no need to trust people or institutions to make transactions
because everything is ruled by a decentralized algorithm
that is, no person or group of people can control it
This algorithm is also open-source and this is very important
because it means that any of us
can see, understand, study and invest
Somehow that protects the consumers
but also open gaps to bad things
like buy a product or a service, receive the product or service and reimburse the money
This possibility make buyers and sellers insecure
and the need of a financial institution to ensure the trust and safety
increases for both sides
Thereby, the costs begin to increase again
Bitcoins try to solve this problem, turning all the payments into non-reversible payments
in other words, once you send the money, you can't have it back
That protects sellers of frauds
because a buyer can't get the money again
and with some adaptations in the system,
like a custody agent that keeps the money until both parties are ok with the sale
and the consumer is also safe in case the seller doesn't deliver the product
Ok, that's really beautiful
But how can these virtual magical coins have value in the real life?
Well, until 2010 they didn't have value in real life
People already had Bitcoins but they were never trade with something in real life
so, it wasn't possible to establish a Bitcoin corresponding value in real life
But that changed in 2010, when somebody decided to exchange 10 thousands Bitcoins for a pizza
Then, Bitcoins worth something in real life
0,0001 pizza
The bad side is that if the person who bought the pizza had kept the money until today,
they would now worth 246 millions reais
Since its begging, the Bitcoin is more and more in focus
Its price increases, decreases, increases and decreases
One single Bitcoin already costed 74 thousands reais in 2017
but today the price is around 24.5 thousands reais
Some adepts and fans of cryptocurrency say that Bitcoins
will be the most valuable and expensive currency in the world
while conservative investors say that they're not safe and it's too dangerous to invest
But let's be critical for a moment
There are so many historical examples of people that tried to predict the future
and failed miserably
An inovation or technology made today can drastically change everything we took for granted
So, all of our predictions of the future fail
Will Bitcoins be the currency of the future?
I think it's difficult to say that with certainty
Maybe they will be and that would be amazing
or who knows if they are the precursor of a financial system even better?
Anyway, Bitcoins deserve all the credit by having showed us the application of a technology
that will change the way we do several things in the future,
Blockchain
The blockchain technology changes entirely our current financial system based on trust
because instead we have an intermediate agent like the banks,
that give us safety in our transactions,
the blockchain allow us to do everything without a central authority
The implications of this are insane and could start a new age of the internet
- and possibly of the society -
People that are excluded of our current financial system could make part of it
because they wouldn't have all the barriers to create a bank account, for instance
To understand better how blockchain works,
let's focus on the Bitcoins example
They are not a centralized currency
In other words, the transactions informations are not processed or kept in big corporations
Instead, they are stored in a vast network of private computers around the world
that are storing these data and computing new transactions all the time
Do you remember the small Bitcoin fee I told you in the beggining of the video?
People like you and me can be part of this computer network
and earn Bitcoins for processing and validating financial transactions
That's the famous "Bitcoin mining"
In a simple way, all of the Bitcoins' world transactions
are computed in a sequency of blocks
So, the name "blockchain", that in portuguese is something like "corrente de blocos"
Let's suppose I want to make a 10 reais payment on the internet
not everybody has credit card so, instead of printing a bank slip
that would take days to be approved by my bank,
I would inform the computer network that I made a payment and now my account
will have 10 reais less and the person that's going to receive the money, 10 reais more
The information of this transaction is arranged in a block
with the other Bitcoins transactions within the last minutes,
and this block is sent to all of the computer network with no exception
to verify its validity and then, approve this block
What if I lie? Saying that I had 10 reais but I hadn't
This is where "blockchain" comes in
Once the payment is approved by the computer network, they are immutable
All of the transactions within the last 10 minutes
are gathered in a block and this block is computed as a whole
there is where "block" comes from
Every new block of transactions is related to the last one
creating a type of chain between them, a history of the global transactions
All of the Bitcoins transactions in the world are saved forever in this block chain
to hack the system, you would have change the last blocks
and to do that, you would have to control at least 50% of all the computers of the global network
and that is practically impossible
Just to compare, in 2015, this computer network that processed the Bitcoins transactions,
had more computational power than our best 500 supercomputers of the world
together
So, it's safe to say that once a transaction is approved by this computer network,
it is going to be saved and safe forever
and because of this "blockchain" technology that Bitcoins are considered safe
Besides, banks and financial institutions can decree bankruptcy
although that is very rare to bigger banks or financial institutions
But at the same time, since Bitcoins are extremely decentralized,
they don't have the same risk
If a person of the computer network stop verifying transactions,
there are millions of other people verifying transactions
and the number of computers in this network increases every day
We will always see resistance to innovation in any field
Bitcoins are not an exception and they are changing our world
and I hope and believe for better
One of the biggest issues of our current global economy
is that it's not inclusive at all
People are deliberately left out
The idea of decentralize the economy, removing mediators
and allowing people to make peer-to-peer transactions
can be a great step towards an inclusive economy
And things don't stop there
Blockchain, the technology that allows the Bitcoins existence,
shows itself being more and more useful with new applications in our society
We can be, in this moment, witnessing the birth of a new technology
that will benefit the society, allowing fair negotiations,
a more democratic and inclusive economy
and, finally, a more righteous society
This is the future that is being developed now, today, in every moment around the globe
Thank you so much and see you in the next video
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