Cripto247: Bitcoin: Analogies, metaphors and parallels

Bitcoin: Analogies, Metaphors and Parallels

News | October 27, 2018 By:

Comparisons help clarify concepts quickly. Especially when it is a complex issue, technical and as comprehensive as bitcoin. Generally, we have little patience to absorb information on new topics. In the era of Instagram scroll, we want concepts pre-masticated, graphed and summarized.

However, to understand a disruption as important as bitcoin requires explanations where many topics are mixed, and it is important not to jump to conclusions. When an explanation is very brief, it seems simple, Utopian, dreamy and childish … and when the dialectic is deep, it becomes long and boring.

Analogies are very effective in establishing relationships in a simple and concise way, generating a new idea. Here are some …

Bitcoin is like cash

It is the bearer and the transactions are person to person. It is not necessary to know the identity of the counter-party to make an exchange and the transactions are irreversible. If it is lost or destroyed, it disappears forever. You can not claim it. If you give it to a third party, you have to trust that it is returned in a timely manner.

However, bitcoin has many advantages over cash. As it is 100% digital, you can send and receive easily, whatever the amount, quickly and economically. You can also have multiple copies available in several places at once. Can you imagine being able to back-up your cash? These are things that traditional money cannot do.

Bitcoin is like email

It can be sent from any device connected to the Internet to any point on the planet. It is sent almost instantaneously. It is almost free to use and the accounts are quasi-anonymous …

One can receive by just sharing an address, but only the one who controls the password can send from that address and be the beneficiary/recipient of the shipments.

Bitcoin operates in a much more sophisticated way than email (or messaging). The email works centrally. The messages are stored by Google, Microsoft, Yahoo, Apple, etc. The accounts are provided by companies and use their systems to channel messages. With bitcoin, there is no company. It has no owner. It is the largest public service in the world and is decentralized. It is an open system and you do not have to ask anyone for permission to obtain an account, nor is there an approval process.

Bitcoin is digital gold

Bitcoin, like gold, cannot be forged. A bitcoin is always a bitcoin, as gold is always element 79 of the Periodic Table. No matter how much it is divided, a molecule of ‘Au’ is still gold, and a Satoshi (0.00000001 the smallest accounting unit of bitcoin) is still a bitcoin Satoshi.

Both are scarce by definition. The offer is limited. You have to find them and extract them. In the case of bitcoin, it is a fixed and pre-established emission. They cannot be made from scratch or by decree. Both are recognizable and durable.

Bitcoin is a personal bank and the anti bank

You can receive, send and treasure money in an account. In the account, you can see the balance and the historical record of transactions.

However, with bitcoin, you can access the money 24/7. Not from Monday to Friday from 10 a.m. to 3 p.m. You can transact without authorizations whatever the amount, destination, or origin of the funds. There are no managers. You can have as many accounts as you want, and open them without talking to anyone, without even giving a name, address, email or identification.

Bitcoin is not an enterprise like a bank. The bank lends the money deposited by its customers, takes risks and responds to its shareholders. Bitcoin has no debts, obligations or negative balances. Accounts have a balance or do not have it.

Bitcoin is an accounting book

In its “pages,” the financial information is recorded, the operations carried out. To be sure that the records are reliable, they must be legalized or verified on a regular basis.

Unlike traditional accounting books (whether physical or digitized), bitcoin anonymously records the transactions of all participants openly and publicly. All operations are visible and can be consulted without permission. In that sense, it is transparent and when distributed, all participants can compare their own copy of the ledger against the other copies. It is updated and synchronized automatically in real time and it is not necessary to legalize or verify them by a third party. The bitcoin protocol is automatically responsible for verifying that what we are seeing is verified and consensual.

Bitcoin is like water

Flowing. In large or small quantities. If the network is obstructed, it searches for another channel. It is difficult to grasp with your hands. Excessive regulations seek to channel, contain or limit entrances and exits. But its source can not be extinguished and flows independently of political directives. If it is prohibited or covered, it continues to work underground …

Bitcoin is an insurance

If a global financial apocalyptic scenario presents itself (rather, when it occurs), bitcoin would be an excellent refuge. It is not susceptible to the monetary policies of any country or to the vulnerabilities of the weak financial system. The history of numismatics shows us that sovereign currencies last relatively little.

If bitcoin fails, it will be zero. But if the dollar fails, bitcoin will be worth 10,000 times its current value.

Bitcoin is like an idiot savant

He knows how to do only one thing extraordinarily well. A phenomenal calculation power. It is not docile or flexible and can not be convinced by reasoning. Rainman could not get on a plane … But he could do exceptional calculations.

Bitcoin is the largest and safest computer network on the planet. But it does only one thing and makes it better than anyone: it generates, validates and verifies the status of the public and distributed accounting book.

Bitcoin is like oil

Oil is the raw material for many chemicals, pharmaceuticals, solvents, fertilizers, pesticides and plastics. It is essential for industry and transportation. On it layers of production and commerce are built.

In the same way, bitcoin is the industrial layer on which many derivatives are being built: payment systems, trading, identity, voting, property registers … bitcoin is the fuel (¿solar energy?) Fundamental for the base on the which is building a new distributed, equitable, transparent and safe world.

Bitcoin is a perfect government

It is built by consensus. The will of the participants is unbreakable. The organization and authenticity of historical information is documented and protected by the system. The process (the protocol) and its results are open, transparent and can be audited  at all times. It is free and voluntary … The consensus is above the content.

The interests of the actors remain in balance. Incentives and market forces are aligned despite huge disputes.

Bitcoin is press freedom

With each transaction, a text can be included. Anything. For any person. There is no way to censor, modify or delete a transaction or its message. Although it offends or is foolish. The record is eternal.

Bitcoin is a rocket

If you want to go to the moon, you have to go up …

This story was originally published in Spanish at Cripto247