How Many People Truly Understand Bitcoin and Blockchain?
Despite the growing popularity and importance of Bitcoin and blockchain technology, only a small fraction of the population has a comprehensive understanding of its underlying principles and mechanics. This article delves into the reasons behind this limited comprehension and explores the implications for the broader tech and financial sectors.
Understanding Cryptography Basics
To fully grasp the intricacies of Bitcoin and blockchain, one must have a solid foundation in cryptography. However, this essential knowledge is often limited to a select few, primarily computer science (CS) majors. In the United States, approximately 50,000 students have graduated with a CS degree each year since the year 2000. This number has increased significantly over the past decade, yet even with this growth, the percentage of people who understand the foundational concepts of Bitcoin and blockchain remains low.
The Evolution of Cryptography Education
Before the year 2000, cryptography was not a widely taught subject, even within CS programs. The subject was either not covered or was only taught to a small number of students. The seminal book Applied Cryptography by Bruce Schneier, published in the late 1990s, marked a turning point in the field, making it more relevant and accessible to a broader audience.
The Current State of Knowledge
Let’s assume that only 75% of CS graduates choose to study cryptography. This means that out of the approximately 50,000 graduates per year, about 37,500 will have some understanding of cryptography. Over the years, this has led to a pool of around 800,000 individuals in the United States who have the fundamental skills necessary to understand Bitcoin and blockchain.
However, not all of these individuals delve deeper into the complex mechanisms that underpin these technologies. A significant portion, around half, may have a basic understanding of hash-linked lists, Merkle trees, and proof-of-work. This narrows the pool down to approximately half a million people in the US who have a more comprehensive understanding of blockchain technology.
Global Perspectives and Misunderstandings
Given that the United States is one of the most well-educated populations globally, it is reasonable to assume that the percentage of individuals with a deep understanding of Bitcoin and blockchain is even lower in other countries. This lack of knowledge is further exacerbated by the incentives and social status associated with pretending to understand Bitcoin. Many people on platforms such as Quora perpetuate misunderstandings by presenting half-baked explanations.
For a long time, Andreas Antonopoulos was one of the few individuals who could comprehensively explain both Bitcoin and the nuances of human communication in this context. As the ecosystem has grown, more people have entered the space, but the majority still lack a deep understanding. Even seasoned journalists, such as Laura Shin, Peter McCormack, and Nathaniel Popper, often struggle to articulate the complex details of how the system works.
The Technical Depth of Knowledge
The superficial understanding of Bitcoin and blockchain is just the tip of the iceberg. When one delves deeper, into topics such as Patricia trees, rollups, and homomorphic encryption, the number of individuals who grasp these concepts becomes incredibly small. Research and development in blockchain technology continue to evolve, making it challenging for even experts to stay fully informed.
Consider the task of comparing two complex blockchain platforms, such as Algorand and Ethereum. Virtually no one has the expertise to meaningfully compare the two in detail. When individuals attempt to justify their feelings on the matter, their arguments are often broad and lacking in substantive details. This highlights the need for a more nuanced and comprehensive understanding of these technologies.
Implications and Future Outlook
The limited understanding of Bitcoin and blockchain has significant implications for both the tech and financial sectors. As these technologies continue to evolve and permeate various aspects of society, there is a pressing need for greater educational initiatives and resources. Greater awareness and understanding will enable more informed decisions and foster a more trusting and secure use of these technologies.
Ultimately, the future of blockchain technology depends on building a more knowledgeable and informed user base. As more individuals and institutions grapple with the complexities of these technologies, the ecosystem will evolve and mature, leading to more widespread adoption and acceptance.
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