Evolution XXX

Short the Banks

Long Cryptocurrencies

Today I received a call from the manager of the local agency of my bank.

" Dear Mr Martins unfortunately our central bank did not aprove to open a bank account for your new company, I am really sorry for this decision but there is nothing I can do about their decision and I hope you can understand. "

I reply: Ok I understand the decision of the bank but there is any reason in particular to that decision because I am being a good customer for all this time with you and never had a single problem with the bank so why?

" Like I said Mr Martins the bank just did not approved your request, I'm really sorry. "

So lets go back 3 days ago.

I have my new company registered in Luxembourg with all licenses that Luxembourgish government require to develop a business under the activity of software development.

Luxembourg government agencies know exactly what we are developing which by the way Luxembourg is very open to companies that work with blockchain solutions and with cryptocurrencies etc.

Since the beginning of the process of registering my new company I was very clear and transparent with Luxembourgish government agencies of what we gonna do: developing apps that provide services for the customers that allow the customer to pay with cryptocurrencies and also fiat currencies using their credit cards like Visa / Mastercard / American Express, etc by using an exchange built in the app exchanging fiat VS cryptocurrencies and after conversion payment done in cyrpto.

Luxembourg government agencies approved the registration of the company providing all the licenses and then one of last steps of the process of course is open your bank account for the company.

So back 3 days ago I was having the meeting with the manager of the local agency of the bank that I work with for some time, never had any problem with them and also them never had any problem with me as their private customer and while I am presenting all the documents of the company to start the process of opening the bank account and when the manager asks exactly what we gonna develop and I describe to him like I did with Luxembourgish government agencies being very clear and very transparent our roadmap he replies well this business area for us as a bank your company is classified in the category of some risk.

I ask then: 

What do you mean business of some risk? Because we are not asking for a line of credit to the bank and all the development is being funded privately, we use KYC ( Know Your Customer ) and AML ( Anti Money Laundry ) for our customers that gonna use our exchange for fiat vs crypto we comply with all legislation required from regulators so what do you mean exactly?

His answer: " Well all business activities are classified into several levels of risk, for example a company working on transportation it is one level, software companies another level etc but don't worry in 2 days our central bank will provide an answer to your request ".

To be honest I was really surprised with that answer because for me a customer which not has problems with a bank, is not asking for money, is just opening a normal current account should be evaluated for if it qualifies for have an account with the bank? That was something really new to me and I was not aware of.

So my only doubt now is they decided to not open the bank account because I was very explicit that we are a blockchain company developing decentralized payment solutions for our customers ( being a competitor of the bank basically ) and for some reason they prefer not being involved with companies that gonna disrupt their own business model?

Honestly I don't know and I think I will never gonna have the answer for that question but one thing I know next meeting I gonna have next week with another bank I will not lie never of course about what we do and gonna develop but I think I will not be so explicit about what we are doing!

So my friends one thing is certain: banks they are afraid, why?

I don't know exactly why because first they discredit saying Bitcoin does not have any value, then they made funny and now they are creating their centralized blockchains and coins like we saw lately for example with JP Morgan Coin.

So until next time peace, love and decentralization!!!

-JM

Evolution XXVIII

What is Bitcoin?

A Peer-to-Peer Electronic Cash System 

Bitcoin first of all is a network. We have Bitcoin as the network and Bitcoin as the currency. 

Bitcoin was created by a developer or a group of developers named Satoshi Nakamoto. Satoshi Nakamoto is a pseudonym and no one knows for sure who this person or group of people is. This makes the real identity of Satoshi completely irrelevant. Bitcoin was released as an open source project and the Bitcoin protocol invented by Satoshi is more of a blueprint than anything else. Satoshi Nakamoto has no control over the network.

Bitcoin is money for the internet, anyone in the world can open an account and start sending and receiving funds. The only thing you need in order to open an account is a computer or a mobile phone and an Internet connection. 

Bitcoin as a network works 24/7. Bitcoin it is completely decentralized and there isn't any government, nation controlling this network. No single entity controls Bitcoin. There is no central bank, no institution, organization or company that has total control of the network. That is why Bitcoin is completely decentralized. 

Bitcoin the currency is "discovered" by a process called mining, a reward for providing security and processing transactions into the ledger called blockchain, a chain of blocks where the amount of Bitcoins are registered into accounts.

The blockchain is a public database of all transactions that ever happened on the Bitcoin network. This database is constructed of blocks that are cryptographically linked together forming a chain. Each block contains a set of transactions during a period of time. A copy of this public database is distributed to everyone in the network.

"By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them. The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation."  - Satoshi Nakamoto White Paper page 4

The blockchain is blocks cryptographically linked together because if someone decides to cheat the network and claim that they have more Bitcoin than they actually have they would need to modify a transaction made in a previous block.
This would break the cryptographic link between the blocks in the blockchain and because everyone else has a copy of the blockchain everyone else would be able to detect this fraud because the cryptographic links would not match. 

The Bitcoin network is structured in such a way that you don't need to trust any other party in the Bitcoin network. It is impossible to cheat about the number of Bitcoin you have, you can't forge a transaction and isn't possible for anyone to take your Bitcoin from you, as longer you control your private key, that is why you should always use a hardware wallet to prevent you being hacked.

Bitcoin is a peer-to-peer (P2P) technology without any central bank, server, institution, government or company managing it. If you’ve ever heard of torrent technology this is similar in the way that there is no single point of failure. The Bitcoin protocol and software coordinate the entire network using miners.

A miner is a book keeper of the system . These miners process and put transactions into blocks. Mining Bitcoin involves solving computationally difficult cryptographic puzzles. The miner that manages to solve the puzzle gets rewarded in Bitcoin.

When a transaction is propagated through the network and reaches a miner, the miner checks that the transaction actually is valid. Theoretically a miner could validate non-valid transactions but other miners would quickly notice that and the malicious miner wouldn’t be able to claim the mining reward.

This way miners are incentivized to perform their job correctly. Today different companies are building data centers in order to profit from Bitcoin mining. You can also mine several cryptocurrencies using your computer, you will use your computer power and depending of the performance of your components like CPU and GPU you will be rewarded.

Why should I research more about Bitcoin, Altcoins, Tokens and cryptocurrencies? 

Well there is no simple and direct answer to that question but like in every evolving process that takes time and takes true efforts, it is always worth it.

Start earning Bitcoin by mining cryptocurrencies ---> Minergate

Do you want to buy Bitcoin? ( In-person / Cash exchange ) ---> LocalBitcoins

Cryptocurrency exchange ---> Hitbtc

Do you need a safe place ( hardware wallet ) to store your coins? ---> Ledger

Like always have a great week and make something amazing!

Your friend, 

-JM