The first and most important thing to know is that Bitcoins and other cryptocurrencies are NOT actual coins. You may have seen pictures on the news of a gold coin emblazoned with a fancy “B”, this picture is just an abstraction of a bitcoin, not the real thing. Try to forget this association you have between cryptocurrencies and the physical coins that we are familiar with. In reality, Bitcoin and other cryptocurrencies are more akin to technology like the Internet than to Dollars, Euros, or any other currency that exists today. Starting out, this can be a confusing concept, but our goal with this guide is to demystify and make accessible all things crypto. We will come back to these technologies, what they do, and why they are valuable later, but first let’s cover the fundamentals.
In order to properly cover these fundamentals, we’ll have to introduce a small amount of crypto-jargon. These terms and the related topics will be covered in great detail later in this guide, but for now, here is how we will use this terminology and how these terms are related. Firstly, we will generally use the term cryptoasset in place of the more commonly used “cryptocurrency.” Everything you think of as a “cryptocurrency” can also be called a cryptoasset.
A cryptocurrency is an abstract type of digital coin intended to be used as money, like a bitcoin. Cryptoasset is a wider term used to refer to any digital representation of value recorded on a special type of shared ledger. This specific type of ledger made for recording cryptoassets is kept up to date by a peer to peer network of computers which collaborate by following strict mathematical rules. This type of shared ledger maintained by a network following mathematical rules is known as a blockchain. Any implementation of this type of shared ledger can be described as blockchain technology. Cryptoassets can only exist as a record on a blockchain, meaning that when the term cryptoasset is used, the fact that a cryptoasset is also a blockchain technology is implied. However, just because something is a blockchain technology, that does not necessarily imply that it is a cryptoasset.
Details surrounding these terms will be laid out later in the guide, but for now, only a general awareness of how they relate is necessary. The way these terms fit together can be arranged in order from most general to most specific as follows: blockchain technology, cryptoassets, cryptocurrencies, and bitcoin. Bitcoin is a cryptocurrency, but not all cryptocurrencies are bitcoins. Cryptocurrencies are cryptoassets, but not all cryptoassets are cryptocurrencies. Cryptoassets are a form of blockchain technology, but not all blockchain technology takes the form of cryptoassets. This guide will always use the most specific of these terms that are applicable within the context we are using it. So, with that hierarchy of terms in mind, we can return to the technology.
Perhaps your geeky coworker or tech-savvy cousin has tried to explain Bitcoin, cryptoassets, blockchains, or some other related topic to you before. Perhaps you learned something, or perhaps you were left with a whole lot more questions than answers. The reason for your confusion is actually very simple: Blockchain technology (the technology that powers Bitcoin and cryptocurrencies) is completely different from anything that you have ever heard of. Blockchains are not only a technological development, but they are also a social, political, and economic development.
Blockchains are complex technologies with the potential to become more useful in day to day life than the world wide web. With today’s difficult to use blockchain applications, the majority of people have no interest in using Bitcoin or any other blockchain. However, as these technologies become more user friendly, the interest in blockchains and their applications will begin to grow. With the information available in this guide, you won’t have to wait for blockchains to become mainstream to understand how they fit into your world.
In this guide, we will tackle the concept of blockchains and cryptoassets from all sides so that anyone can understand both the current and future applications of blockchain technology. We will also tackle the most commonly discussed aspect of blockchain technology, its value. Is it valuable? Can it provide you value? What does that even mean? This guide will delve deeply into the value of blockchains and cryptoassets, but we will never be discussing their monetary or speculative value. Instead, we will focus on what we see as the true value of this technology, its ability to help humanity create more socially equitable systems.
We at Blockteq believe that blockchain technology is valuable because it enables humans to create systems that everyone on the planet can trust, not just people of privilege. In order for a new blockchain based system to create this widespread trust, however, people will need some sort of understanding on how blockchains work. Once people understand how blockchains work, they can begin to imagine how a blockchain can be used as a tool for reconfiguring or replacing existing systems that have lost their trustworthiness. With that said, while there is great potential for blockchain technology to be used as a tool for creating more trustworthy and socially equitable systems, this is not a guarantee. It’s all up to how the users (that’s you) decide to use it.
For many, the thought of learning to use blockchain technology seems like more trouble than it is worth. Today’s blockchain technologies are complicated and unrefined, which means that they can be difficult to understand. While it this doesn’t need to be the case, we at Blockteq believe that there are two main reasons why people often find blockchain technology so confusing.
The first reason is that blockchains are a new type of technology, one unlike anything we have ever seen before. It is helpful here to think of technologies such as electricity, cars, telephones, computers, and the Internet because they too were all once considered new and confusing. Perhaps you understand the mechanics of how all of these technologies that we use everyday work, but you most likely don’t. We certainly don’t. What we do know is that a home lit by electric light bulbs functions differently than one lit by candles, that a car is completely different from a horse and carriage, and that the Internet is much more than a fancy telephone. We know this because we use these technologies constantly and understand their usefulness through experience. When these were still new technologies, it was difficult to imagine them being useful at all, let alone being used worldwide daily. The blockchain fits this pattern of an emerging technology with the potential to drastically shift our day-to-day reality. But, because of their current new and confusing form, it is still challenging to understand how they could actually make anything easier or simpler. Understanding the potential applications of any new technology before it sees widespread usage is difficult, Blockchain technologies are no exception to this fact.
The second reason as to why understanding blockchains can be difficult is that imagining how they function requires recognition of why we need them. As of right now, only a handful of people have connected the “how blockchains work technically” and the “what social purpose do blockchains serve” dots together. For blockchain technology to be used appropriately on a large scale, these dots will need to be connected. The former has many clear explanations, the latter, not so much.
Blockteq’s explanation of why we need blockchain technology starts with the fact that we believe that the dominant systems and institutions in today’s world limit a large majority of people from being able to experience the same quality of life which is afforded to the few. The inequality that exists within these systems and institutions means that they are oppressive by nature. As a result of the oppression maintained by these systems, a majority of people are in desperate need of new and improved systems. Blockchains can be used as a foundation on which new liberating systems can be constructed. We believe this to be the most useful aspect of blockchain technology.
Imagining the blockchain as a tool for liberation can be difficult when the initial wave of people adopting blockchain technology has mostly consisted of privileged financial speculators (stock trader types) who are not directly affected by the oppressive nature of our existing systems. Most of these privileged speculators already have a (relatively) stable fiat currency, a robust section of high-quality online banking tools, a government which they feel represents them, and very few if any social barriers from entering any market. This means that as of now, economic, social, and governmental systems are already working for this small group of privileged individuals.
These people are NOT who this technology was created for, and they are a minority globally. Most people alive today are oppressed and afforded few to none of the luxuries that the privileged blockchain speculators assume to be a natural part of life. Because of this, people who feel as if they can trust in our financial, political, and social systems typically have trouble understanding the need for blockchain technology. In order for people of privilege to see the full potential of this technology, they must put themselves in the shoes of an average person from Venezuela, Zimbabwe, Turkey or even the shoes of a less privileged person living in the U.S.
An empathetic shift in perspective allows a person of privilege to realize that the financial, political, and social systems in place today are beyond sub-par, they are oppressive. As this shift in perspective comes with the admittance that many of the dominant global systems are dehumanizing for the majority of the world’s population, we will name it the “human perspective”.
Accepting the ‘”human perspective” comes with admitting that oppressive socioeconomic and political systems are not exclusive to the developing nations, but are equally alive and well in “economically thriving” nations like the United States. Our nation is not immune to the problems of Zimbabwe or Venezuela, in fact, the same exact problems exist here. These problems are just hidden behind clever cultural myths such as “anyone can climb the ladder to the top” and “our fair democratic systems means everyone in the United States is afforded the same freedom.”
As a person of privilege, for whom these myths seem true, adopting the human perspective requires conceding that these myths are indeed myths. This means admitting that the economic, political, and social systems many of us believe to be secure, trustworthy, and fair are actually none of these things. In fact, these systems lack security, are untrustworthy and behave unjustly towards most of their participants. The fact that these systems already oppress certain groups of people means that they are inherently oppressive systems that could begin to oppress you at any time. Additionally, because these systems are highly oppressive to some people, nobody should trust them. For those who place their faith in existing systems, the thought that these systems are dysfunctional and dishonest can be a tough pill to swallow.
Because the truth about our systems is a hard one, adopting the “human perspective” and understanding the social need for blockchains as a person of privilege can often be much harder than understanding the mechanics of how blockchains actually work. This is why plenty of people understand how the technology works and are still screaming that blockchain technology has ”no use case”. In other words, these critics do not see why blockchain technology would be a suitable replacement for current systems because they do not see how they are oppressive.
Underprivileged groups of people, on the other hand, are already able to understand the unpredictable and oppressive nature of our systems from first-hand experience. They can see how this technology is useful because existing systems don’t work for them at all. Because of this, we believe that the most oppressed people in our world will be the first ones to discover the best applications for blockchain technology and unlock its true value. These most useful applications of blockchains don’t exist because oppressed populations are yet to have access to quality information on how blockchain technology can work for them.
Improved understanding surrounding the functions of blockchain technology paired with dialogue on how it can be used as a tool for humanization will lead to innovations that cannot be imagined today. In order for this to happen, however, a collection of educational resources must exist that facilitate a dialogue about the function of blockchain technology and how it can be used as a tool for social change. This guide aims to be one of many educational resources adding to this dialogue, not a resource declaring that we know the truest value of the blockchain and that you can too if you just listen. In order for the information offered here to be of value, it must be taken as our part of a dialogue in which you too are involved. The only way to cultivate a rounded understanding of the true value of blockchain technology is through dialogue, not by just reading a guide.
Adding to the confusion surrounding blockchain technology are many of the existing educational resources on the topic. These resources often reject the possibility of offering a rounded education through dialogue by adopting an extreme position on one of two opposing ends of a spectrum. At one end of this spectrum sits resources which exclusively explain the speculative financial value of the technology. At the other end of the spectrum, there are resources which offer highly technical explanations of blockchain technology but overlook its social purpose.
Educators focused on the speculative value of blockchain technology believe that the best thing about cryptoassets is their ability to be traded as speculative investments, much like stocks. These educators usually attach the “true value” to its price in Dollars, Euros, or another fiat currency and speculate that its value compared to these currencies will increase tremendously over time. Explanations which attach the value of cryptoassets to Dollars or Euros create various negative outcomes. One such outcome is that they lead some people to feel like they are being pressured to join a pyramid scheme. These people often think something along the lines of, “if this stuff were so great, they wouldn’t have to promise crazy returns to make people want to buy!” This group writes off the technology entirely because they are confident it is exclusively an asset forming a giant speculative bubble and is good for nothing but speculation.
Another likely outcome of this type of explanation is the opposite reaction. Overly hyped up explanations of the speculative potential of this technology make people excited about investing in a revolutionary, disruptive, world-changing technology. They can see how much cryptocurrencies have increased in value since last year, and they rush to buy something they have little to no true understanding of. This fear of missing out (FOMO) creates the very speculative bubble that the other type of person was afraid of. Thinking of Cryptoassets exclusively as speculative tools is counterproductive as it divides people into two extreme categories: the “cryptoassets are worthless” category and the “we will all be millionaires next year” category. Both groups are probably wrong, and neither group is prepared to use the underlying technology to create meaningful change.
At the other end of the spectrum sits the highly technical way of explaining blockchain technology. This style of education is perhaps less damaging than the other style, but certainly not more useful. The issue here is that while there are many good explanations of how the technology actually works mechanically speaking, they rarely explain how it can actually be used. This is a lot like explaining how the motor of a car works to a person in 1910 without showing them how it powers a four-wheel driving device. If you asked this person “Isn’t the motor impressive? Don’t you think it will change the world? Don’t you want to use this product?” This person would probably give you a long blank stare and then ride away as quickly as they could on a horse. This is how a lot of people react to technical explanations of cryptoassets. Even if a person does understand how blockchains work from a computer science perspective, it is difficult to see the social applications of the technology by just looking at it technically. This lack of connection between function and use can lead the average computer scientist to lose interest quickly.
The point of mentioning the current state of blockchain education is to say that this guide aims to avoid the common problems associated with blockchain education. We will examine both the technical and social sides of blockchain technology while optimistically imagining its potential and realistically discussing its shortcomings. Seeing as each reader carries their own knowledge about the world, we also invite and encourage you (the reader) to contribute any and all thoughts you have to share as they relate to the topics at hand. Using our collective knowledge, we can develop a base of knowledge that will offer a balanced understanding of blockchain technology and where it does and does not fit into our world.
Since you will be giving us a piece of your attention (and hopefully your perspective too), we would like to make a few promises in exchange. Firstly and most importantly, this guide will NEVER try to convince you that it is a good idea to invest in blockchain technology by buying a cryptoasset. Cryptoassets are highly volatile and as such, they are incredibly risky to hold as investments. We at Blockteq do not recommend cryptoassets to the average investor and are never offering financial advice of any kind.
Once you have finished reading this guide, you will have a great amount of knowledge about cryptoassets, blockchains, and their true value. With this knowledge, you may or may not decide that owning a cryptoasset is for you. You will, however, have a sufficient amount of knowledge on blockchain technology to begin to imagine how you could use it to improve systems which you participate in. Perhaps you might discover that blockchain technology could improve some aspects of your life without having to actually purchase a single cryptoasset for yourself. Either way, this guide will never try to sell you anything, and that’s a promise.
Secondly, we promise never to present our opinions with the thought that they are absolute truths that you should believe too. The information presented here surrounding the reality of our human situation is never intended to replace what you already know. You are a subject in your world and we don’t know more about your world than you. Only you are an expert on the world from where you see it. This guide simply is an explanation of our perspective on the world as it relates to blockchain technology, when it contradicts with your perspective, make a note of this and let us know! The discovery of these contradictions will help us develop a much fuller picture of the objective reality in which we both exist and will enable us to come up with much more effective solutions to the problems we encounter in this reality. This guide has been created to begin a dialogue and is never intended as a one-sided presentation on an objective reality that we are all participants in.
Finally, this guide promises to never attempt to explain any technical aspect of a cryptoasset based solution without first explaining the real-world problem it attempts to solve. In other words, this guide won’t just point at the motor and say “look, a carburetor and fuel valves, what a nice motor!” This guide will say “this is a nice motor because you can feed it gas! It will turn these four wheels and take you to the grocery store and back without leaving a pile of horse poop in the road.”
We promise that we will hold true to these promises so that the reader can easily, comfortably, and safely learn about Bitcoin, blockchains, and cryptoassets. Our goal for this educational resource is for it to be one small part of the large dialogue on how blockchain technology can be used to create a world full of more socially equitable systems. Our hope is for our readers to take this information in with the same participatory intentions. To help the reader fully realize this intention, this guide asks three things from you.
1. Think from the “human perspective”.
2. Engage in a dialogue with the text, our view is limited.
3. Constantly imagine where blockchains fit in your world/where they don’t.
If you can agree to these things, then you are ready to begin your journey of becoming an expert on the topic of Bitcoin, Blockchains, and Cryptoassets. Thank you for joining Blockteq with the intention of co-creating a more trustworthy and equitable world through the use of blockchain technology. We are excited to co-create it with you.