Tales from the Crypt(ocurrency)

Cooch
Oh Cryptkeeper, enlighten me on the subject of cryptocurrency.
Bast
Well, first of all, it’s kind of like the democratization of currency. It’s designed to take the power away from governments and banks, and return it to the people.
Cooch
Okay … power to do what? You mean power to issue currency?
Bast
Yes, and directly exchange it. So power comes from the government to issue currency, and from the banks to exchange currency. Cryptocurrency allows both functions to come from the people.
Bast
The banks also issue money when they loan money to folks too. In fact 97% of money created is by banks loaning money.
Cooch
So how does one obtain cryptocurrency? I need the 101 course on this, obviously.
Bast
You can get it two main ways: you can mine it, or you can buy it, usually with fiat currency (dollars, pounds, euros, etc.).
Bast
Mining it requires computer power – and for Bitcoin and Ether, considerable electrical power too. There are other types of lesser cryptocurrency too, called altcoins.
Bast
The platform all this works on is called the blockchain. It’s like a decentralized ledger.
Cooch
So is it a matter of exchanging currency with people without needing to pay any service fees? Your bitcoin wallet is like your own bank?
Bast
In a way (you don’t have to pay bank fees – there are no-fee options).
Bast
So yes, a crypto wallet is like your own personal bank. That’s why storage is such an issue.
Cooch
We’re talking about changing the way we trade with each other then? Is the thinking that it will eventually replace each country’s individual currency?
Cooch
So many questions I have …
Bast
Eventually, yes, this is a possibility. Maybe not in our lifetimes. But it may well become a viable alternative currency. In some ways, it already has. Especially in countries where the banking system is not well developed.
Bast
Think of it as the first of many transnational currencies.
Cooch
I like revolutionary things. And I expect to see revolutionary changes in what’s left of our lifetimes. I’m feeling, though, that there is still an element of control involved, like we’re getting rid of the grip banks currently have and shifting it elsewhere. Which is still change, of course.
Bast
Well, not so much control as trust. There needs to be something called Proof of Work for Bitcoin, where others need to review and agree with any mining transaction that takes place. So the creation of bitcoins needs to be checked.
Cooch
Reminds me a bit of the organizations Frederic Laloux researched and profiled in Reinventing Organizations. In terms of position descriptions and salary, people present what they will bring to the team and propose a salary, and the team decides whether it is fair. So this kind of “revolutionary” awareness – that people can actually run complex systems – is appearing in a lot of placed. True sea change.
Bast
There’s a lot to learn about cryptocurrency, and I feel I’ve only scratched the surface – but I’m feeling a big itch!
Cooch
Just don’t do anything rash. (Groan)