“Grandpa, what is that large black building?”, said Tim.
“Oh, that’s where our crypto is created”.
“Oh, you mean Bitcoin?”
“No, Tim. It’s not Bitcoin. Bitcoin is something else, but it’s not government sanctioned. But hush. The government doesn’t really want us to talk about it”.
“But Grandpa, why did someone create a copy of our Bitcoin? I mean, of our money that is not Bitcoin? Didn’t they know they could get in trouble?”.
“Well. Bitcoin’s not the copy, it’s the original. It was created to be resilient against all forms of attacks. Bitcoin’s production facilities are not easy to find. They shut down the mining facilities, but then the miners created smaller farms and distributed the hash rate even more”.
“Smaller farms? Can you do that? I thought you needed exabyte links for the full nodes?”. “No, Tim. They don’t. They are using second layers and sidechains. Only the most important transactions go on the main chain. That’s why they are still able to use Tor.”
“Oooooh! Sneaky! But wouldn’t that make the fees on-chain skyrocket?”
“It did, at times. Other times, it was low. And if you was willing to wait a bit, your transaction would always get through. But people are always so impatient, think their transactions are the most important ones. The smart ones created lightning channels when fees were low.”
“Lightning channels? I never heard about those?”
“Well. Basically it’s the same thing your Mom does when you go to the shop for her. She give you 1000 in the start of the month, to save on the on-chain fees. Then you spend from those whenever you are at the shop. If you were smart, you could do the same to the shop, and save a ton of fees there too”.
“Oooh! And the government wouldn’t even know when I was in the shop, because I only paid once!”
“You got it!”
“But what stops the shopkeeper from running away with the 1000?”
“Well, here’s the thing. You don’t really give him the 1000. You just set it away in a multisig address. Think of it as a box, with two chambers and two locks. Whenever you need to move something from one chamber to the other, you’ll need both keys. You have one key, the shopkeeper has the other. If you are really smart, you can run errands for the shopkeeper too, you just need to have the same arrangements with those places. I’m sure he’d be willing to pay you a bit, if you just charge much less than the on-chain fees.”
“But….that would mean that the government would not know who was in which shop?”
“They wouldn’t. Of course, there’s privacy transactions on the government sanctioned coin too, but they quickly made it cost more when they bailed it out in 2085. Nowadays, only the rich people can afford that.”
“But Grandpa, why would anyone trust it? At least, the government validates the transactions for us! And since China, Japan, Europe and Africa are on the same system, I guess they are validating what our government is doing?”
“Supposedly, they are. Truth is, noone knows anymore. There used to be this thing called fiat that noone could validate either, and it’s quickly getting just as bad with government crypto. But Bitcoin doesn’t have this problem! Since the chain have been kept small, you can validate it on your laptop in the matter of a week or two!”
“Ooooh! And since you can get new blocks continuously, it wouldn’t matter that we just have a 100 Gbps line at home!”
“You’re a smart kid! Good thing you took that crypto class at university before it was banned.”
“But I don’t understand it. Fees got high anyway on Bit…I mean, the government crypto? Why aren’t we doing lightning network there?”
“Well. It needs certain features from the chain to make it safe. Irony is, they had it fixed by some point. But the government broke it again when they took over, to make sure they couldn’t be safely be bypassed.”
“But…why aren’t we all using Bitcoin, then?”
“Oh..one day we will, son. One day, we will. But people are hard to convince. They always think the government looks after you. The irony is, Bitcoin was created to have a neutral, non-government controlled economy. But people mistook it for yet another cheap payment system. Once someone created something they promised to always keep cheaper, people were easily fooled. They didn’t understand it then, and do not understand it now, that freedom and fair economy goes hand in hand, and that fair economy only comes when it’s distributed and controlled by the participants.”
Liked it: 4
Loved it: 2