Bitcoin vs Banking [infographic]
There is a new video that is taking the Bitcoin community by storm. Produced by recently launched internet cable brand SQ1 (pronounced square one), the video titled “The Bitcoin Phenomenon” explores the groundbreaking aspects of digital currency. Filled with interviews with some of the crypto community’s best and brightest, the half-hour long video gives a glimpse into the Bitcoin ecosystem by exploring what makes the cryptocurrency special, while also providing narrative regarding technology, legislation, important political implications and what those interviewed envision for the future.
The idea for The Bitcoin Phenomenon came about a year ago, when founder of SQ1, Bhu Srinivasan, was introduced to the idea of Bitcoin from a friend and decided to explore it further. Although not a Bitcoiner at heart, Srinivasan knew that the Bitcoin conversation was just getting started and chose to get a crew together and shoot at the Bitcoin Conference in San Jose last year. SQ1 reached out to individuals they thought would make perfect guests for the interviews, each of whom had a different background and expertise within the digital currency space.
Of those featured in the video are well-known individuals within the community including, Bitcoin core developer Gavin Andresen; venture capitalist Jeremy Liew; Coinapult CEO Erik Voorhees; Peter Vessenes, Head of the Bitcoin Foundation; Co-Founder of Coinbase Fred Ehrsam; medicinal marijuana activist Steve Kubby and Buttercoin CTO Bennett Hoffman. Also interviewed are crypto-anarchists including, Trace Mayer and founder of Antiwar.com, Angela Keaton.
The Bitcoin Phenomenon begins by giving an extensive and thorough background of Bitcoin and the technology surrounding it. The interviewees share personal stories with how they got “hooked” on Bitcoin, while defining several key terms that can puzzle even the most experienced user.
Andresen states in the short film:
“Satoshi brilliantly designed the incentives, so you don’t need to pay anybody to make sure that all transactions are valid, because they get paid by the system itself. The reward for doing the work of processing transactions and making sure there is no double-spends is tied into the creation of new bitcoins. So the people who are being awarded new bitcoins are the same people who are making sure double-spends don’t happen – That’s the way new bitcoins come into existence. These people who validate bitcoin transactions are called miners.”
The video accurately illustrates the function of mining in the simplest way possible. Those interviewed also explain the way miners are paid, and the fact that Bitcoin only has a finite amount that will be created (21 Million created will be reached in 2140). “There is a lot of altruism in the system, the very first miners just wanted to help – they thought it was cool. As soon as there was an exchange rate, miners realized they could turn the [bitcoins] they mined and make money,” Peter Vessenes stated regarding the growth of mining in late 2009 and 2010.
Not only does this short documentary focus on the basics, but it also explores various views on the clash between the politics of early-adopters, the VCs and entrepreneurs looking to take Bitcoin to the mainstream. The interesting fact is that The Bitcoin Phenomenon was filmed nearly a year ago when these topics were not spoken of very regularly. However, in that year we have witnessed the explosion of Bitcoin and digital currency in the press, and the onslaught of legislative and political debates throughout the world. The topics covered in the video are happening now, making it even more effective as a source of knowledge.
The interviewees in the video spend most of their time explaining the benefits and challenges surrounding Bitcoin. Among those are the infamous Silk Road and other criminal activities that have soiled its reputation. Trace Mayer explains, “What I am interested in is the ability of the market to solve these problems, because these particular market actors were excluded from traditional banking systems. Bitcoin has provided a solution to that.” He continues, “it is very difficult to exercise your speech if you don’t have the ability to transact. What we are seeing with Bitcoin, is money has actually become speech.”
One of the benefits explored by the video is the benefit of zero transaction costs. Nearly everyone in the video agrees on the importance of what no transaction cost could provide for the economy.
“The first wave is building the infrastructure, which just makes the thing work,” explains Jeremy Liew. “Right now just to make Bitcoin work at all you need exchanges, to get money into bitcoin; you need wallets, to hold the bitcoin; you need payment processors to spend the bitcoin.”
A benefit that is very exciting within the community is the ability to make microtransactions. In card-not-present transactions, the smallest transaction that can be completed is around 30 cents. This is because it costs roughly this amount just to process the transaction. However, with Bitcoin users would be able to complete microtransactions without the merchant having to foot the bill for the transaction fee. For example, if you wanted to pay a penny to read an article online, that can be made possible with Bitcoin.
The documentary also discusses the variety of political viewpoints of the future of Bitcoin. Each individual interviewed has a certain vision for the future. The radical politics of the Bitcoin movement believe it should remain close to the fundamentals, while others debate that in order for the virtual currency to become mainstream, the establishment interests could help legitimize Bitcoin.
The Bitcoin Phenomenon provides great insight into the world of Bitcoin, where the future is headed for digital currencies and what that means to the future of the global economy. This video can be understood by even the most inexperienced individual. It can bridge the gap between those questioning its validity or debating its usability. The Bitcoin economy is still growing and new technologies are springing forth each day. Vessenes states, “I think it is the protocol of money on the internet.” In fact, SQ1.tv just started accepting Bitcoin on Monday, and currently over 50% of users have used Bitcoin to pay for their subscriptions. Although the future of the virtual currency is unsure, plenty of leaders in the community have some idea of what is to come, even if their ideas are all a little different.
“I think Bitcoin will grow to something where 5 percent of people’s wealth will be held in Bitcoin.” – Fred Ehrsam
“Bitcoin might succeed somewhere else in the world. Maybe Bitcoin would make sense as their national currency. I think it will be interesting in the next five years to see what happens.” – Gavin Andresen
To watch the complete video visit https://www.sq1.tv
The post The Bitcoin Phenomenon appeared first on Bitcoin Magazine.
