Understand what Bitcoin is for and why it matters for content marketing! – WAU
No, let’s not start this article by explaining what Bitcoin is. We’re on a blog about Content Marketing, aren’t we? So you can read this post normally, understand the context in which these two themes intersect or click here and go straight to an explanation of what it is and how it works […]
No, let’s not start this article by explaining what Bitcoin is. We’re on a blog about Content Marketing, aren’t we?
So you can read this post normally, understand the context in which these two themes intersect or click here and go straight to an explanation about what is Bitcoin and how it works, For any professional or marketing enthusiast to understand!
Anyway, if you haven’t had time to analyze Bitcoin properly, then you’ll find simple answers, in a way that conventional news and blogs won’t tell you.
Check out a little of what’s next:
Interestingly, I am a marketer and also Bitcoin! I have been using digital currency for about four years, organized my first event on the subject in 2014 and became professional in 2016.
That year, I worked on three different projects:
- I gave seven lectures on Bitcoin in companies, universities and conferences;
- I contributed to the creation of more than 50 blog posts on the subject;
- And finally, I got certified professionally by the CryptoCurrency Consortium, a global entity created by entrepreneurs, academics and developers.
During that time, I also started to study Content Marketing and became a marketing analyst at Websites Are Us. So, get ready for an explanation without calculations and with very simple numbers.
What is money and currency (and why you need to know this)
You will find different definitions in the economics manuals or in the press. However, our focus at this point is to show how the digital tools behind money affect people’s behavior.
In general, to be considered currency, a good must have three characteristics:
- Value reserve: there must be a consensus that this material or immaterial good can be used has value;
- Means of exchange: likewise, there must be a consensus that people can accept this good in exchange for goods and services;
- Common unit of account: finally, this object (physical or virtual) needs to be divisible for people to set prices based on that unit.
However, over time people have realized that these concepts have become only references, losing the character of rule.
Today, we have so many ways to make exchanges that hundreds of different things can have currency characteristics, but many of them have no use in society.
The ancient Romans, for example, used salt as money for a period; the aborigines of the distant Yap island used giant stones, and we used paper money and bank transfers.
Defining the value of money
So, if there are so many ways to understand what money is, you can see what there is a subjectivity behind that value.
After all, in our society, a large stone or a handful of salt would have no value as a currency. Cultural, psychological and political variables are also considered in this process of general acceptance of what is or is not money.
According to economist Carl Menger, the value of everything is subjective under a simple equation, determined between scarcity and utility of a good.
Uncomplicated: an asset is more valuable as it becomes rarer or more useful for a particular purpose.
Therefore, to consider something like money, it cannot be a totally scarce asset, but it cannot be totally abundant either.
For example, we could not use diamond as a currency, as it is very difficult to find, extract and distribute among people; we could not use sand either, as it is so abundant that it would be impossible to control the flow of money.
This is the reason why gold was an important reserve in several societies: it is an easily manipulated material and has a reasonable abundance in nature.
So, from here on we will work with the idea that, for something to have value as money, it only needs to be widely accepted in society and there are people working on it.
What problems did we have before Bitcoin?
We have talked about the history of money so far, going through antiquity, modernity and contemporary times.
Problems related to monetary policies have been debated for centuries and many of them are still quite common.
However, the emergence of digital money technology has made the following problems less resolvable by ordinary people, something that the whole world already shows signs of discovery:
About a century ago, nations began, en masse, to create their own central banks. Do you know what a central bank is? It is the regulatory authority for the currency market in a country.
Many claim that centralizing the banking system has been a viable solution in the past, but over time, this centralized control has proven to be increasingly complicated and sensitive to creating distortions in the market.
One of these distortions is the double spend. Double spending means manipulating electronic bank records in order to create money “out of thin air”.
That is, through fraud and computational errors, it is possible to distort bank transactions in such a way that the same transaction – for example, a common payment – is computed twice, benefiting someone illegally with it.
The use of fractional reserves divides the opinion of many economists. For some, this method is an inevitable solution, others believe that it is the root of several other problems.
But what are these reserves? In a simplified way, it means that a central authority can authorize commercial banks to re-lend their clients’ money.
So, suppose you keep $ 100 in a bank, but never withdraw more than $ 10. When the institution realizes this fact, it manipulates the other $ 90 idle in its account for its own benefit.
But how is it done? As follows: when you are not using your money, the bank lends that $ 90 to other account holders and also to other banks.
So, in fact, a lot of money that comes into circulation is not the result of wealth generation, but the manipulation of funds by savers and account holders.
This phenomenon is called creating book-entry currency and it works more or less like a financial pyramid (yes, the world system works that way and they never told you!).
In spite of everything, there are control mechanisms, and this issue is very controversial. Each country has its own rules for its fractional reserves.
What is Bitcoin, how it works and how it solves problems
We come to the main point of this text. We already know how money works, we also know what problems current monetary systems have faced. Now, how about we talk about solutions?
It is worth remembering that the problems mentioned are not recent, but they are extremely complex. To give you an idea, the ancient Greeks were already debating the existence of inflation!
Therefore, only with the popularization of the internet are the first definitive solutions emerging.
In parallel, experts have been looking for digital solutions for the use of money since the beginning of the web.
In 1998 a Chinese cryptographer named Wei Dai published the first design of a fully computational decentralized money system called b-money.
Later, a cryptographer named Nick Szabo published an article with the idea of a system called bitgold, with proposals and ideas that clearly influenced the Bitcoin architecture.
Until, in 2009, Satoshi Nakamoto published a whitepaper with the Bitcoin code. Quickly, some people from the community became interested and started to encourage the development of the project.
Since then, Bitcoin is a system that works organically, in a decentralized way, throughout the world.
There is no company, government or entity responsible for its operation, anyone regardless of nation, creed or ethnicity has free access to buy, sell, mine bitcoins or even propose changes to the system.
What is Bitcoin
Bitcoin is a point-to-point (P2P or peer-to-peer) electronic money system. So, let’s recap some facts:
To transfer money from one person to another, a common bank transaction needs to be processed by the computers of a bank and even the Central Bank.
That is, when person A transfers money to person C, there is an intermediary B – the bank – that processes and records this exchange.
When person A deposits money into his account, agent B is also responsible for keeping, processing and recording that deposit.
In the case of Bitcoin, this exchange involves only two parties, a sender and a recipient, who sign a transaction. After signing, all this is encrypted and sent to a great public record of all transactions: Blockchain.
The system also allows ordinary people to provide data processing power to the network using computers called data miners. There is no central computer, the system is distributed thus.
This process seems very simple, doesn’t it? Apparently, so simple that it can make no difference at all.
In fact, there would be no need for Bitcoin if, in banking transactions, there were no registration errors, fraud, undue charges etc.
In particular, many people are concerned about their own banking privacy, espionage and unfair charges. After all, historically, institutions’ decisions can fail, generating unpredictability in the market, inflation and even break-breaking.
So these are reasons why people are adopting Bitcoin, which we will investigate in detail below:
How it solves problems
Remember the double spending problem mentioned above? With billions, perhaps trillions of daily transactions taking place on Earth, many frauds, thefts and errors can occur through double spending every day.
In the case of Bitcoin, sending money from one point to another does not go through a third agent. Transactions, both receiving and sending money, are stored on the parties’ own computer using wallet software.
That way, there is also no risk of your money being manipulated by someone while you are not using it. After all, everything is in your custody, inside your computer’s HD!
In addition, in several countries, including London, the value of money in circulation tends to decrease, due to system and people failures.
Finally, using digital currencies like bitcoins, the rate of issuing new currencies is programmed and highly predictable, eliminating inflation risks considerably.
That is, the entire market already accurately estimates the rate at which more bitcoins will enter circulation until 2140! Therefore, with this mechanism you will never be taken by surprise when shopping and see that your money is not worth much.
What is Blockchain
The time has come to talk about the technical framework of Bitcoin: the Blockchain. Blockchain is a record of all bitcoin transactions in history.
This large public record of all transactions, constantly updated, is freely accessible. Do you want to see it working? Just access this link!
We already mentioned that you can store your bitcoins in wallet software, but what about transferring? How is this work done?
On Blockchain, all history records are stored publicly, but everything encrypted. Thus, you can only know the details of the transactions you participate in.
In summary, every time someone transfers funds from one wallet to another, the two parties sign that transaction through a bitcoin address. This data is encrypted and stored on a blockchain. It is only when the Blockchain computes these records that this transaction is confirmed.
In the eyes of those who spend or receive, this process is similar to that of a bank, it is true. But in the case of digital currency, the system behind it is decentralized.
Miners in the network
As we have already mentioned, banks are centralized registries and blockchains are decentralized public registries.
Banks, in general, have large computing centers to process all transactions for the day. In a decentralized network, such as Bitcoin, anyone in the world can purchase computers to provide processing power to the network.
Basically, you buy a mining computer and connect it to the network. This computer spends all the time calculating and recording people’s transactions. Of course, in exchange for remuneration in bitcoins.
This decentralized architecture is also a good defense mechanism, as the network will not be affected if there is a local block.
In addition to remuneration for transactions, miners also receive to process the issuance of new bitcoins, following the logic of the programmed issue mentioned at the beginning of the article.
Thus, the entire planet is populated by miners who provide support for the system to function! You can also be one, although London energy tariffs are not very inviting.
Today, there are enterprises that form true conglomerates of data processors, called pools mining.
Advantages of using Bitcoin
Bitcoins have multiple features, they are not just for buying products! Do not believe? In addition to freeing the user from relevant problems, such as the misuse of fractional reserves, the risk of double spending and inflation, it has been much sought after by investors.
Best investment in the world
For two years in a row, 2015 and 2016, Bitcoin was considered the best investment of the year all around the world.
With an appreciation of 92% and 120%, respectively, between the periods of January and December of each year, these indices do not seem to expect to decrease now.
In fact, Bitcoin’s numbers as an investment asset are to be the envy of any bank investment, real estate or stock exchange, although it is at greater risk.
BTC has gained prominence not only due to its appreciation, but also due to the fact that several crises are happening in important financial centers in the world, such as Europe, India and Japan.
Today, using bitcoins to replace national currencies has become a safe measure for many citizens.
In countries with dictatorial governments and intense capital control, such as Zimbabwe and Venezuela, cryptocurrencies have become true shields against poverty.
Right here, in London, we have also suffered in the past with a sudden confiscation of savings, right? Bitcoiners would be protected in this situation.
The physical distance between banks, as well as the fees charged, has always been an obstacle to sending and receiving money between countries.
What do Bitcoin and Content Marketing have to do?
Finally, we come to the part that we connect all this technological paraphernalia with our dear marketing every day!
We, professionals and enthusiasts in the field of digital marketing, can already use various services and ideas based on Bitcoin and Blockchain. Doubt? Check it out below:
Protection of your content
Cryptocurrencies, like Bitcoin, can be divided into many parts. Since everything is digital, you can split values up to eight places after the comma!
Exactly. You can transfer up to 0.00000001 BTC to someone, if you want. This is currently an absolutely insignificant amount, well below a penny!
So, if your blog is being visited by robots that try to send advertisements or disrupt traffic to your site, now you can protect yourself.
By integrating your content into a bitcoin wallet, you can charge very small amounts for your website to be accessed. Your readers won’t mind paying less than a penny to read material from your blog.
A hacker, who programs robots to make thousands of successive visits to your domain, will not be happy to pay this bill.
Today, in addition to transactions, it is also possible to store records on the Blockchain. This technology has been enhanced since the emergence of bitcoin to be a safe, private and inexpensive way to store data.
It is even possible to generate contracts electronically, which interact with Blockchain. Thus, their payment system is all carried out automatically on the network, making fraud and non-compliance difficult. They are called smart contracts or smart contracts.
Currently, smart contracts come to replace the traditional authentication and registration mechanisms that we have today, such as notaries.
So, to protect yourself from theft of intellectual property (hello, designers and copywriters!), Just find a service that makes registration and authentication on blockchain, check if the current legislation is compatible and protect your production at low costs, without leaving home!
There are even national initiatives in this area. One of them, tested and approved by our entire ecosystem is OriginalMy, an authentication and registration service on the Bitcoin Blockchain.
Today, collaborative blogs can function automatically using digital currencies. Can’t you imagine how? Think you can integrate the bitcoin wallet of writers and readers with your website or blog.
Therefore, writers can submit articles to autonomous blogs and be paid through readers’ access or through donations.
In addition to automating your content production, the market itself will filter the content paying the best posts.
And, if you are the owner of the blog, you can spend less time and effort in choosing and producing your articles!
A very interesting example is the Backfeed blog, which works autonomously using this method. Who knows, you might be the next to practice this initiative?
Payment from content producers
Today, freelance professionals are distributed around the world, including content producers. Especially in the marketing world, many tasks can be done over the internet, increasing the supply and demand for distance work.
However, the costs, risks and difficulties in payments and receipts among people who are very distant have always been an obstacle in this area.
Thus, mechanisms that generate bank slips, which facilitate the payment or receipt for freelance jobs using bitcoins are increasingly in demand.
Now, professionals from all over the world can intensify the competition, because using cryptocurrencies the transfer of money becomes much faster and cheaper!
Where to buy and sell your bitcoins
Today, London is the largest bitcoin market in Latin America. We currently have about 7 exchange where you can buy and sell your bitcoins using reais, get to know some of them:
When spending, remember to consult Biscoint.io, a service that indicates the best offers to buy and sell in each London exchange.
In addition, there are traders – individual exchange agents – who can make this exchange using specific platforms or social networks! You can find them at:
Incredible, isn’t it? Bitcoin technology has arrived to revolutionize many markets. Far beyond a simple means of payment, this innovation has come to change paradigms even for marketing companies!
Did you like it? Did you have doubts or want to know more curiosities? Know how to invest? Ask right now in the comments and let’s get this discussion going!