Introduction to Decentralization

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Module 0: Introduction to Decentralized Currency

We live in a debt-based economy, where money is created by debt. It is a financial system that requires people to be in debt. It is controlled by cental banks.
Close to 92% of world money exists in digital form (no paper money).
People have no power over the production and devaluation of money.
The existing financial system places the people at the bottom, meaning that all risk is carried over to the people (2008 GFC).
Governments having control over money means that they can wage wars, force people into debt, take away people’s freedom and control over their money.
Bitcoin reversed the role between governments, banks, and people. It is the first decentralized cryptocurrency in human history. It is not controlled by any country.
Bitcoin can be broken down to 100M satoshis (1 satoshi = $0.0000864533). This means that you can buy a very small part of a Bitcoin.

A custodial wallet is a wallet that you do not control and are prone to hacks (similar to a bank).
A non-custodial wallet is a wallet that you have full control over (being your own bank).
One of the most popular non-custodial wallets that you can use for the majority of coins is Coinomi (coinomi.com). This is available on both Android and iOS.

Mnemonic recovery phrase is a set of words (12 to 24 words depending on the wallet) which can be used to recover your wallet in the case that you lose your phone or device.
The recovery phrase should never be stored via a screenshot, email, or plain text. If a person has access to your device (hackers or if you lose it) then they can gain control of your wallet and funds. For this reason, we recommend storing your words safely offline.
Some safe methods of storing your phrases include (use two methods): on a piece of paper, USB stick, in a password-protected ZIP file or a combination of such methods.

Bitcoin is the oldest, most popular, and widely accepted decentralized cryptocurrency. It can be exchanged into almost all other cryptocurrencies.
You can view all other cryptocurrencies and the exchanges that offer them via: coinmarketcap.com.
A centralized exchange (like coinbase) is the most popular way to purchase Bitcoin. It does have its drawbacks as you have to reveal your personal information, bank account details while losing the power of being your own bank.
A decentralized exchange or a peer to peer marketplace is another method of purchasing Bitcoin (localbitcoins.com or BISQ). This method does not require that you reveal your personal information, though they are slightly less user-friendly.
The best way to purchase Bitcoin is in person and via cash (with someone you can trust).

When you send a transaction, you pay a transaction fee. This can vary depending on the priority of the transaction and the time of the day (how busy the network is).
Before sending to someone, always confirm the first 3 letters of numbers, the middle 3, and finally the last 3.
Send a small amount to verify their account and ask for a confirmation that it has been received.
You can verify the transaction on a tool called a “block explorer” (blockchain.com), by entering a person’s wallet address or transaction ID. This can also be used to view the account’s balance and other transactions.
You only ever need to give someone your bitcoin address, no personal information is needed. Which means that anyone, even a dog can have its own bitcoin wallet address.

To see a list of online and physical locations that accept Bitcoin, you can go to (coinmap.org).

Ethereum has its own currency called Ether. It is a token that can be used within a variety of applications. Ethereum differs to Bitcoin, as it was not designed to be a cryptocurrency. Rather it is programable money which can be used to build decentralized applications (DApps). For example for rewarding people for watching advertisements, for listening to music, etc.
You can see some examples of decentralized applications (DApps) on: dapp.com/search.
Ethereum and ethereum based tokens (you can create your own token) can be used to create your own economy (for example rewarding people who generate power via solar panels, that can then be used to reduce electricity bills).

A decentralized autonomous organization (DAO) is an organization represented by rules encoded as a computer program that is transparent, controlled by shareholders and not influenced by a central government (jurisdictionless).
A decentralized organization usually has a method of governance (decentralized governance), used for making decisions and funding proposals or ideas. This increases accountability and transparency.
DAOs are the future of organizations. They exist in the digital realm and can not be taken down or censored.

Last updated 5 years ago

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