₦airaland Forum

Most people have never stopped to think about what money is. Money is not the same thing as wealth. It is simply a system of accounting that facilitates the exchange of wealth.

Everyone wants a lot of money, but what people really care about is what they can buy with it, not the money itself. Imagine having a big bag of real dollars but being stuck on a desert island for the rest of your life with nowhere to spend them. How happy will you be with these useless millions?

A lot of people worry that bitcoins are “just data.” But in the real world, money is just information. More specifically, money is a reliable way to show that someone gave something of value but has not yet received something of equal value in return (at least, not yet in a form that can be used directly). So that other people don’t forget, he keeps crisp bills in his wallet as a “symbol” of how much money he had to give up.

In other words, the way money works are kind of like a big ledger. It has “entries” that show how much real value we can get from each other. With official currencies like the dollar or the naira, this book is kept by the government. It also gives the government a lot of power over money, which history shows it will always abuse. For example, it will start to cheat by making “additions” to this ledger, which means it will print a lot of new money and cause inflation. Or, like in Cyprus and Lebanon, they will devalue it, freeze bank accounts, or “write off” half of your money. In general, every country is always doing something crazy in this area.

In the case of Bitcoin, this ledger is decentralized, which means that everyone in the network has a copy of it, and the rules for adding entries are known ahead of time and are very strict. This means that no one or no group can make new coins out of the blue (which would cause inflation), freeze (or take) your coins, or tell you you can’t pay whoever you want.

There has been “decentralized money” in the past, like a system based on gold. No one, for example, can just “print” a bunch of gold coins out of thin air. The gold has to be mined from the ground first, which takes a lot of hard work. And the system was “spread out” as long as everyone kept their own gold and didn’t trust middlemen. But gold’s biggest problem is that it is “hard” to use for day-to-day transactions. Try to pay online with gold! Because of how it is made, gold is a very inefficient way to make a transaction.

Bitcoin comes into play here. It is the first currency in the world to be both digital and not controlled by a central authority. Bitcoin is guaranteed to be rarer than gold, easier to use for transactions than “modern” online banking, and more private than cash when it comes to money. Because of this, Bitcoin is “better money” in every way and could replace most other types of money in use around the world.

https://altcoin.ng/why-do-most-people-dont-understand-bitcoin/