Andreas Antonopoulos: How Bitcoin makes us as powerful as banks

Rage Review : Andreas Antonopoulos, a computer scientist and distributed system expert and author of "Mastering Bitcoin", believes that Bitcoin technology has created a new payment network model that is popular all over the world. This payment method is not restricted by national borders. Billions of users without bank accounts or users who do not enjoy adequate banking services can conduct transactions around the world in a very short time. This is because Bitcoin has a very powerful decentralized system that can coordinate a large amount of information resources and solve the Byzantine fault tolerance problem.

Translation: Nicole

Andreas Antonopoulos, a computer scientist and distributed systems expert who works on security development, first learned about Bitcoin in early 2012. Although he had missed Bitcoin several times before, once he dug deeper into Bitcoin, he said, "It suddenly dawned on me that this was more than just a currency." He quickly stopped what he was doing and began to devote himself to the Bitcoin field full-time.

Antonopoulos, author of "Mastering Bitcoin," host of the Let's Talk Bitcoin podcast and a frequent speaker at technology conferences on digital currencies, explains why Bitcoin and its underlying technology are so disruptive in his latest podcast, Unchained. (The podcast is available on Google Play, iTunes, Stitcher and TuneIn Radio, and it explores blockchain and fintech.)

“The concept of Bitcoin and Internet money creates a new model for a global payment network that is not limited by national borders, just like the Internet, which allows you to run financial applications that are controlled by software rather than mathematical rules ruled by some political party.”

He said the network would allow all kinds of applications to process transactions as low as a few cents or as high as hundreds of millions of dollars, which would be impossible in the traditional financial system.

During our fun-filled conversation, he explained why:

“Bitcoin doesn’t care if you’re a person, a piece of software, or an automated dog-feeding bowl.”

At the same time, he further described the future operating model of taxis and disaster relief assistance.

He described how Bitcoin technology will allow everyone, including the billions of unbanked and underbanked, to have “the same power that current bank users have, not just access to a bank account, but all the services of a financial institution — the ability to transact in record time around the world — 24 hours a day, 365 days a year, in any currency.”

Andreas Antonopoulos

If you’ve ever wondered how exactly blockchain technology works, Antonopoulos gave insight into why Bitcoin makes the system more powerful. He said:

“Bitcoin is not a currency in the traditional sense. It is a very powerful decentralized system that can coordinate a large amount of information resources and solve the Byzantine fault tolerance problem. This is a computer science or distributed system problem. The principle is that when you have a system that coordinates all the Internet or any network, you don’t need to know whether these systems are true or false, whether you should trust these systems, whether your information is encrypted, and the really difficult problems are when you try to coordinate resources to perform operations or reach a consensus on the state of the system.”

He explains how the technical breakthroughs behind the solution (Nakamoto consensus and the proof-of-work algorithm) work, what blockchain is, and refutes criticism that the Bitcoin network is just a waste of effort.

This week we documented an episode analyzing the hack of the world's second-largest Bitcoin exchange, Bitfinex, which lost about 120,000 Bitcoins, worth about $78 million at the time. But Antonopoulos explained that this doesn't mean Bitcoin is insecure, it's the centralized system that's insecure. Since the Bitcoin software can be downloaded to a person's phone or computer, if people don't store their Bitcoins with a third party, then "if you want to hack a million Bitcoin accounts, you have to hack a million computers."

He noted that the bitcoin space right now is like the internet in 1990 or 1992, with the reputation of smart contracts and blockchains suffering a severe blow due to the DAO incident (a decentralized autonomous organization that raised $150 million in ether but had $50 million stolen).

“Smart contracts are as mature as a one-year-old baby, because it’s a one-year-old baby. In comparison, Bitcoin is like a toddler. Although Bitcoin technology is just a toddler, it doesn’t take hundreds of years to grow—it may only take ten or twenty years. In ten or twenty years, Bitcoin technology can reach a level of maturity, like all the institutions we see now, with low costs and high-speed transactions. This is the real revolution.”

Listen to the full podcast on Google Play, iTunes, Stitcher, TuneIn Radio, and the web, where Antonopoulos explains why he believes that in 100 years, the word written in stone will become written in blockchain (showing that blockchain, like stone, can preserve information for a long time), how much time it takes to send money via Bitcoin compared to wire transfers, and why he charges a 20% fee for bank account transfers, but does not charge this fee for Bitcoin payments.