One of the biggest problem with blockchain (“crypto”) seems to be that nobody really understands it. We’ve all heard the explanation that you have blocks, and transactions go into blocks, and they’re signed with signatures, and then somebody mines it and then somehow there’s a new kind of money…? My friend says so, anyway.
I like to keep my feet warm, and so I’m very glad that in five years’ time, Ben Horowitz, the co-founder of Andreessen Horowitz, is going to be sending me a pair of luxurious alpaca socks. The bet, which originated on RapGenius, is now a reality, thanks to Planet Money. And while NPR has written the broadcast up as a story, it falls to RapGenius, again, to annotate it. And it’s in the RapGenius annotations where things start getting interesting.
Recently I have had various questions asked about BitCoin. My favorite is my wife’s typical “How’s the money laundering going?” – Which always makes me chuckle. But let’s take a Q & A approach to some general questions that the not-so-familiar will ask about BitCoin.
Where does the money come from?
A: In VERY general terms, the money is awarded from the network. Think of it as similar to the federal mint printing money and shipping it to banks. Just take away the Federal Reserve, and central banks, and you have a form of currency which is more like BitCoin.