How Bittorrent and Crypto Are One and the Same
It will not be wrong to say that the future of the internet belongs to cryptocurrencies. They have been the craze since the invention of bitcoin and a huge community of crypto-investors believes that digital coins will change the way things have been working in the world, more specifically how payment systems work. Cryptocurrencies have been attracting more and more investors and traders towards them. However, a lot of the people are still not aware of how cryptocurrencies work. Let’s take a look.
How Cryptocurrencies Work
First, you have to know that a cryptocurrency does not have any physical existence or appearance. It is a currency that exists only in the digital world. The main idea of digital coins is that no bank or government produces it. A private company or a group of developers and programmers could create their own cryptocurrency. Through mining (which is a topic that needs a complete post for explanation), crypto coins are generated. The record of every digital coin generated, exchanged, traded, spent, and transacted is stored on every computer connected to the blockchain – an infrastructure on which cryptocurrencies exist.
The Idea Is Not Really New
You will be surprised to know that the idea of digital coins or cryptocurrencies is not new. A software tool like Bittorrent is a perfect proof of the existence of decentralized technologies before the invention of cryptocurrencies. Bittorrent allows you to share files on a peer-to-peer network where a file is stored on not one but many computers. When you download the file, it is downloaded from all the computers that contain that file. The best thing is that Bittorrent lets you download the file simultaneously from all the computers. The computers do not have to have the complete file. Instead, your Bittorrent will download whatever chunk of file it finds on any computer on to yours.
How Cryptocurrency and Bittorrent Are Similar
Conventionally, your file downloads depended completely on the server that had the file. If the server shut down, experienced issues or was slow, you had to face problems with your download. In short, your download depended on the computer from which you were downloading the file. Bittorrent completely overhauled this idea to introduce peer-to-peer sharing. In this model, your torrent software downloads hundreds and thousands of chunks of your desired file from tens and hundreds of computers. If even one computer shuts down, the software will download the file from some other computer.
Cryptocurrencies work on the same principle. They take away the power that banks and other institutions had as they had control over your money. If you made a transaction through your bank, its speed depended on the bank’s computers. The bank charged you as much money as possible for keeping track of your money. Every transaction you made went through bank’s servers. With cryptocurrencies, the entire record of your digital coins is saved on a peer-to-peer network, called blockchain in this particular instance.
Banks are not even involved in cryptocurrency transactions. The record of your crypto transactions is not being stored on one computer. In fact, every computer connected to blockchain holds a copy of the ledger with a record of every single transaction that has ever taken place and will take place in future. In simple words, bittorrent and cryptocurrency are prime examples of shifting the control from a centralized entity to a completely decentralized environment wherein everyone is the owner and no one is the owner at the same time.
If you have been sharing files Bittorrent and downloading them as well, you will not have a hard time wrapping your head around the concept of cryptocurrencies. It is important to mention here that the founder and creator of Bittorrent has already started to work on his own cryptocurrency for Bittorrent.
Is BitTorrent good for the future?
Maybe you have never heard of Bram Cohen. You are not the only one, neither have I, until last week. I bet you are like me and heard of BitTorrent? Well, he is the inventor!
So if he makes an announcement about the crypto-currency world should we listen? My guess is yes.
So what is the big announcement? He plans to create his own crypto-currency.
Even that there are hundreds of alt-coins and tokens out there, he feels that he has something new to bring to the table. Also he has stated that he will devote a full time effort not just in creating, but in maintaining the new currency which doesn’t have a name yet.
Let me try to speculate here. How about the BitTorrent? Or just a Torrent? What do you think? What should he name the new crypto-currency?
My feeling is that he plans to experiment with new ideas and see what kind of impact he can make in the crypto world just like his impact with the BitTorrent protocol.
Cohen has presented at the Stanford blockchain conference and you can see his white paper from this link:
It seams that one of the things he is attacking is the waste he sees in Bitcoin and some other alt-coins. He also talks about solutions but doesn’t seam like he has the optimal solution yet. My impression is that he is at early stages in this project.
Some of his views have been revealed in the Steal This Show podcast which you can listen to here:
My speculation is that his idea is that the he wants a regular Joe on a cheap old laptop, hooked to the internet to be equal to someone on $10,000 gaming rig with the state of the art video card and have similar value when it comes to securing the network. That is not the case right now, since my old laptop is worthless when it comes to securing Bitcoin or most of the alt-coins. So if this is the idea, it’s a good one. The big question is can Cohen deliver?
Well, I’m going to lean towards yes. But time will tell. I do want to bring this to your attention, so if later this or next year you see something announced from him, it’s been in the cooker for a while and it might bring something new to the crypto world.
What’s your opinion? Looking forward to your feedback.