As part of a new one Tweet asking all writers to send him a message with their questions about Bitcoin, CoinDesk journalist Leigh Cuen, posted a reply on Twitter from none other than the beloved Harry Potter author J.K. Rowling.
“”I don’t understand Bitcoin“” said Rowling added, “Please explain it to me“”
Dear JK Rowling:
The first thing you need to understand is that Bitcoin is magic. It enables you to exchange money with anyone in the world instantly, cost-effectively and securely without the need for a centralized Pixie-based banking authority.
Chapter 1: Nobody’s White Paper
Bitcoin was invented by a mysterious computer programmer named Satoshi Nakamoto, almost certainly a pseudonym. In Bitcoin’s 10-year history, lThe identity of its creator was never discovered. We can call it here “Who has no name”.
Chapter 2: The book you write yourself
Possession of each coin is immediately confirmed and recorded in a digital book called Blockchain, similar to that of The acceptance pen records the name of each potential new Hogwarts student in the admissions book. Instead of registering magical births, we register who has a specific coin and who doesn’t.
This record book is public and allows anyone to see who has owned a particular coin throughout its history. A good visual representation of this process is a loan card for library books.
Unlike Gringotts (as well as Muggle banks (non-magical people)), Bitcoin has no fixed opening times. You can send your Bitcoin 365 days a year, day and night, anywhere in the world, and the recipient will receive it in seconds. It’s also pretty safe, no dragons are needed.
Chapter 3: The Incompatible Coin
According to Gamp’s Law of Elemental Transfiguration, new money cannot be conjured up out of nowhere. Bitcoin respects this particular law much better than any government-issued currency. There will only be 21 million coins on the Bitcoin network, and nothing can change that. By limiting the number of Bitcoin to this finite amount, the scarcity gives each coin a certain intrinsic value.
It also protects Bitcoin from the extreme hyperinflation problems associated with government-issued coins.
Chapter 4: The Magic Mine
Bitcoin transactions must be validated to be added to the blockchain log. An algorithm called Proof-of-Work or PoW enables everyone in the world to contribute to this process by using the computing power of the computer to solve complex mathematical equations.
The first miner to confirm each new transaction called a block will receive a new Bitcoin issue that has never been issued before as a reward. This procedure would certainly be a good candidate for the Absurd Patent Office.
Chapter 5: The Secret Key
Users save their Bitcoin in a digital account called “wallet”. Each wallet is protected by a unique private key, which is sometimes registered as a series of readable words. Similar to a key or spell, anyone who knows the right combination of words can access the coins stored in a specific wallet. In addition, losing this key means that the corresponding wallet can never be opened again. For this reason, it’s important to keep your wallet’s private key secret while keeping adequate backups in as many places as possible. Seven is a good number, and you don’t even have to kill someone to do it.
Unlike sending bank transfers, checks, or other online payments, when sending and receiving Bitcoin, both parties’ private information is not directly disclosed. To get Bitcoin, you simply share your public wallet address, a sequence of letters and numbers, which in itself does not pose a risk of hacking.. Kind of like an email, but for the money.
Chapter 6: The Faceless Exchange
Bitcoin can be bought and sold through any number of online markets, known as exchanges. L.Coins can be exchanged for almost any global currency (except perhaps galleons) at constantly fluctuating prices. They can also be exchanged for other blockchain-based currencies.
You don’t have to buy a whole coin either. You can buy any part of Bitcoin that is divisible up to 100,000,000 unique pieces. For example, 0.01 BTC is currently valued at around $ 92 (or £ 72).
Chapter 7: Blurring the Future
In Bitcoin’s 10 year history, our community has changed in many different ways. Although the technology was originally designed to enable people to safely send money online without the supervision of banks or governments, it is now much more.
Blockchain is used to create self-executing applications that somehow think for themselves. Developers use the technology to create impossible-to-hack voting platforms, impossible-to-save file storage methods, proven fair betting systems (which will surely fuel Ludo Bagman’s anger), and even authenticate and disseminate art. Everything means for people around the world.
We cannot predict all of the magical effects of Bitcoin’s underlying technology on our future lives. Fortune telling is, after all, an imprecise discipline. What we can say with certainty is that the strength of blockchain lies in the redistribution of power. It eliminates governing bodies and enables people to share knowledge, wealth, and even control over the privacy of each individual.
Benjamin Pirus contributed to this article.