171106 Trusted Distributed Networks

trusted bridgeYou’re walking along the street, minding your own business, when a stranger comes up to you and says, “I’ll give you $10,000 for your hat.”  You know the hat is worth at best $25.  In fact, there is no love lost were you to part with this hat which you’ve been meaning to replace for months.  But this man’s proposal is crazy.  Who would pay $10,000 for a cheap hat? And, were you to agree how would he pay you?

If he gave you $10,000 in cash, chances are much more likely the bills would be counterfeit than real. Besides, who wants to walk around with $10,000 in cash on them? A check wouldn’t be worth the paper it was written on.  By the time you cashed it this guy would be long gone.  You can accept Mastercard or Visa with your smartphone.  The fee, though, is 6% or $600.00 in this case.  His phone allows him to make a Paypal payment.   But you don’t have a Paypal account.  What do you do?

You use Bitcoin, of course. You flash your Bitcoin wallet address barcode which his Bitcoin wallet reads and sends you the $10,000 in Bitcoin.  You give him the hat.  An instantaneous, no-fee, anonymous transaction.  You don’t have to pay a processing fee, the transaction happens in the wink of an eye, he doesn’t have to know your name, you don’t have to know his, and it is completely trustworthy.  That’s the value of Bitcoin’s trusted, distributed network.