BITCOIN

IN BRIEF

By Professor Rama Varanasi

LOL !

Version: 1.0
Date: December 24, 2017


Bitcoin is just another form of money.

In 10,000 BC Man wandered the planet Earth with basic knowledge of survival. It was
simple and all about only two things : FOOD and SHELTER.

1. Individually he could not achieve his goals so he started to collaborate and live in
groups. He lived in caves and have a common campfire and all the neanderthals used to
group near the fire and barbecue the hunt. The bigger the animals, the bigger the
groups of men to hunt it down. Bigger groups bigger results.

2. This co-operation and co-ordination created Society. This created Tribes. This created
a common understanding and common set of rules to be accepted in that society.

3. When a society was created, the expression of feelings became more complex. Every
new person of the tribe brought in with him a new SKILL and INNOVATION to the table.
When there are more skilled people, there is more than one way to do a particular
work. One work but multiple ways to do it. This created COMFORT.

4. The concept of COMFORT manifested itself into many forms and the idea of
HAPPINESS is personalized. Every person has his own idea of COMFORT and HAPPINESS
which created NEED and DEMAND.

5. Highly complex rules and regulations started to follow. People wanted others items
and came together at a certain time and place to trade goods. COMMERCE was born
and MARKET places were created. People exchanged items with others. They fought
among themselves and finally agreed to have a standard. BARTER system was born.

6. DEMAND and SUPPLY followed and science of COMMERCE and governing laws came
in. There is a GOVERNMENT now which regulates trade and commerce. Different people
wanted different things and they don’t want FOOD in return for the SERVICES.

7. MONEY was born. It is the common form for commerce. Buying and selling involved in
converting its value to a common valuable item.

8. Time now is 1000 BC. The people started mining and found valuable items. The
common form of money is METALS and STONES. GOLD and JEWELS were used.
Commerce became complex and standards for exchange and conversion were put in
place by governing bodies and governments.

9. With trading markets came GREED and EXPLOITATION. People ripped off other
people for valuable metals and jewels. So carrying the heavy metals and jewels was not
practical anymore.

10. With Markets came BANKS to store the valuables. MONEY manifested itself into
another form. A trusted note signed by the central Banker in that town played as a form
of MONEY.

11. Time now is 1700 AD. Paper is considered as Money. COMFORT and HAPPINESS
became complex. GREED made people produce NECESSARY items as a profession and
people started taking advantage of the ENVIRONMENT that they lived in. More Greed
resulted in more Exploitation of the Environment.

12. Governments and Countries formed. People exchanged Money between each other
with Conversion rates. Stock Exchanges for Money and goods were born. Trading
involved the exchange of value of the goods rather than the goods itself.

13. Around 1800 to 1950 AD a common value system was formed. VALUE is not equal to
the quantity of the GOODS. Money meant paper and not the GOLD and JEWELS it
represented. This brought in INFLATION. One United States Dollar in 1950 got 3 pounds
of tomatoes but now $1 USD just 1 pound of tomatoes.

14. Time now is 1970 AD. Human expression and communication and society was highly
complex. A computer was born. Machines took over what people used to perform. All
they needed was Electricity and the machines did the work 24/7 around the year.

15. People did not like the Government regulation and Banking system so they changed
the currency type. MONEY manifested itself into another form. DIGITAL.

16. Every transaction involved regulation and tax. People did not like that. In order to
avoid audit and taxes people exchanged MONEY digitally and BITCOIN was born.

17. Bitcoin works just like how the HAWALA system worked. In HAWALA People took
money to a non-standard government body and exchanged $50,000 into a simple
physical TICKET. That physical TICKET was sent to the other person. Any person with that
TICKET is considered good for that $50,000

18. Just like the same HAWALA system, BitCoin has a DIGITAL Ticket. Just like the Stock
Exchange, people with a Kilo of RICE increased the price based on the demand. The
other people saw the demand and increased the price further high and bought and sold
RICE not for themselves but for another making money on the transaction. This made a
kilo of RICE increase from $10 to $15. Middle men made that extra $5 bucks.

19. Someday when you have to pay the real goods behind the virtual money and the
real goods don’t exist, the market crashes and the value of BITCOIN comes down to
ZERO. It is not even surprising if the value of the BITCOIN could go negative leaving the
GREEDY person with his money as BITCOINS penniless as it does not translate to the real
goods behind that money.

20. So if the market crashes 10 people with 10 BitCoins will be able to get only 1 Kilo of
RICE and the rest 9 people loose the virtual value of their money.

21. BITCOIN is virtual money of the future and it does not translate to physical goods. If
the market crashes, you’ll have data on your hard disk which is worthless and cannot
buy you a Kilo of RICE. Please stay away from it !!