In the world of digital currencies, most people are left with more questions than answers. For example, is digital currency better than paying for stuff with my debit card? There is at least an answer to that, for the most part, digital currency is not as convenient as paying with cash or credit card. But it might be better than writing checks, and there are still a few people that write checks.
Just a quick note on debit cards, debit cards were poised to be a great system until someone noticed that some merchants did not want to accept debit cards for small purchases. Lawmakers got involved, found out that banks were collecting a small fee and they made that illegal. The result was less than perfect. This legislation ended free checking. Banks were hoping they could make enough money off the debit card fees to offer zero fee checking accounts. No longer.
When it comes to getting something for nothing, there usually ends up being a time when the person who pays a lot of fees for other people that are getting something for free feel cheated. Electric cars have become a new plaything of the rich. They have collected the subsidies for buying the $70,000 cars, and now they drive by the gas pump where taxes are collected in their electric cars. The poor schmuck that could never afford an electric car, or even a newer car ends up paying the gas taxes.
So the promise of a digital currency might go beyond just being a shiny new object. Can consumers keep money in the “bank” without banking fees, can they spend the money without large transaction fees, can they move their money around without having to hire a gaggle of lawyers? These seem to be things free people should be free to do.
Enter blockchain. The first major scientific paper to presage a digital currency may have been titled “Bitcoin: A Peer-to-Peer Electronic Cash System” and it was authored by Nakamoto. But Nakamoto was a pen name. The hidden actor produced an open source repository that supported bitcoin, solved the double-spending problem and used a peer to peer network to update the ledger and supported transactions and the integration of such into the public ledger.
Nakamoto created (mined) block zero of the Bitcoin block chain for a reward of 50 bitcoin. At the time, that was worth less than a dollar. Now that would be worth more than $40,000. Due to additional mining activity, Nakamoto owns around 980,000 bitcoin.