What is bitcoin?

Attempting an analogy to explain bitcoin is precarious because there’s nothing quite like it. Even the best of them will be imperfect. There are comparisons to fungus, with descriptions of antifragile and decentralised networks. Tulips bulbs and rai stones, indestructible piggy banks made of transparent plastic, and on and on. Let me attempt one with prison currency. Prisoners need a proxy for currency as they are not allowed to possess cash. So how do they “pay” for laundry service, hygiene products, protection, a haircut, a book, chocolate or even alcohol? The medium of exchange must be durable, uniform and have a wide acceptance. That is how instant noodles and canned fish became prison currency. But cigarettes are top of the pecking order. Notebooks are kept. Prisoner X will note down how many cigarettes he owes Prisoner Y, and Prisoner Y will make note of what Prisoner X owes him. That book documents all the transactions. To prevent fake entries, a third individual is selected as a witness. He signs the entry made in the books of Prisoner X and Prisoner Y. Cigarettes or instant noodles or canned fish are bitcoin. Notebooks are ledgers. The similar format in the notebooks is blockchain.

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