News about Cryptocurrencies


Blog English

Decentralization is one of the best and deepest innovations in the history of computing.

In its origins, the power of calculation was concentrated in the hands of very few. The three most powerful calculators in Europe added more computing power than the rest of the entire continent.

Then came the home computers. And now almost all of us have, in our pocket, at least one quad-core CPU with 2 Gb of ram and 8 Gb of Rom.

Today, there are no banks that have a mainframe (central computer) that comes even close to the computing power of its own clients. Not to mention the connection to the network: a million people with a connection of two Mb/s add more bandwidth than the bank's own mainframe can ever have.

In practice, the software that controls the bank would be much better if it did so in the mobile phones of its users, for the simple matter of resources.

Not even the powerful data centers of major companies such as Google, Facebook, Amazon, can ever exceed the sum of the power of all smartphones and personal computers of their respective users.

The fact that today the imbalance of hardware capacity is on the part of the user in such a pronounced way, changes things very strongly, and it is not difficult to understand how. The software will leave the data centers to end up in the pockets of the people. All because the software gravitates to where the resources are, and the hardware resources are in the pockets of the users, collectively.

Let’s get to the point. A service is decentralized when:

1. It is installed on your computer, smartphone, refrigerator, or any device, and does not need a central service.

2. Provides services based on cooperation with other devices.

After downloading peer to peer files, bitcoin has been the first and an exceptional example of how important a phenomenon of its kind can be. In conclusion, the very concept of decentralization is terrifying for many.

We are witnessing the birth of many projects able to decentralize traditional models. For example OpenBazaar for the Amazon model, IPFS for Dropbox, Twister for Twitter, Tox for Whatsapp, Steem for Wordpress, Zeromail for Gmail / Outlook, YaCy for Google. They are, for now, only examples without great pretensions, but they thoroughly explain the idea of ​​future potential.

The immense fortunes enjoyed by the current protagonists of the internet are mainly due to the fact that they have centralized all the resources in a single location. If someone or something appears to unexpectedly decentralize, their power disappears.

It is very feasible to build an Uber or an Airbnb without using any central server. With all the savings, freedom and resilience that derive from it. In fact, another characteristic of decentralization is resilience. That is, the ability to withstand attacks without breaking. In practice, it means that the number of users who will not stop working to maintain the network is immeasurably higher than the number of users needed to keep the same network on its feet. In the case of cryptocurrency, for example, the dark market is in itself more than enough, in terms of cash flow, to have the management standing. You can carry out speculations and oscillate the value as much as you want: the result is that the network will not fall. 

In five to ten years’ time, we will all use decentralized services. This will cause the fall of some major companies and the birth of others, those that will create the services and will be able to profit from a business model linked to customers, to the cryptocurrency, or mediation.

Or perhaps other models of business will be born: but what is certain is that, as is always the case, it will not be chatter, defamation or media terrorism that will stop a new disruptive wave of applications. It is an unstoppable wave, thanks to not only technology, but also due to the immense benefits it will bring to ordinary people. 

Without much effort, I can imagine that after a few years, decentralized applications can easily become "boxed" products. You purchase a box, it connects to the router, and you can get a taxi, a business, a bed & breakfast, or whatever you want, wherever you want, without intermediaries.

And all this technology can only be put into practice using cryptocurrencies. I will expand on this fundamental point, in another post that’s soon to come.

Blog English

One of the most repeated questions about cryptocurrencies is what is their intrinsic value and why they are accumulating so much value if in fact it is just a simple software.

Those who are accustomed to reasoning about physical goods often find it difficult to understand an absolutely abstract concept, such as cryptocurrencies. 

What should be simple to comprehend is that its value lies precisely in the services they offer. Suffice it to think, metaphorically, of the value of a small magic suitcase that could contain an infinite amount of gold, and that could also teleport quickly to another magical suitcase at any distance. How much money would you be willing to pay for this service?

Cryptocurrencies allow you to conserve value, translatable in money, in a simple code, memorized, stored in an electronic device, or written on a simple piece of paper, in unlimited quantity; and transfer that value without the distance being a conflict.

If today the euro or the dollar is used as a currency, it is because we are obligated to do so, without there being any tangible, intrinsic value behind the piece of paper or the bank account, but rather those that are represented by the services offered and the corresponding government guarantee.

In the case of cryptocurrencies, there is no type of coercion that forces us to use them, or gubernatorial force that protects them. Its price comes from the market, and the merit it gives to the technology on which each cryptocurrency is based. That is, the application of free market rules: the price will be that in which supply and demand are found.

This could give you more security, especially as an investment alternative to traditional assets, which in any case, retain their own intrinsic risks. Risks that, as in the case of currencies in progress, are very difficult to identify and quantify.

How can we not think about the extreme case of Venezuela, where the illusion of being able to create wealth from nothing by minting more and more currency has contributed to the ruin of the whole country, where a taxi driver or fruit farmer prefers to be paid in cryptocurrencies and not in Bolivars. Logical, if we think that today a Bolívar equals a tiny portion of the euro, how much is it worth, for example, a bitcoin? 

As mentioned before, I consider it important to view cryptocurrency as an element of important diversification in the global investment portfolio itself. Because the classic assets of finance, such as currencies, stocks, bonds, real estate, commodities such as gold, all have their own risks hidden in their normal evolution, and in the structures of control and management that accompany them.

We could fill this article with cases in which some actions lost much of their value in the stock market overnight, or the loss of value of a good that was considered as safe as a property, but that would make for an extremely long list.

Blog English

I became interested in the world of cryptocurrencies in 2012, when bitcoin traded at $5, more or less. Not taking it seriously, I mined about 10 and I forgot about them. After less than a year, the price went up to 50 dollars. Awesome. Tenfold.

Then, the skeptic sirens began to ring. Sham, Ponzi scheme, fraud, hoax, etc. Eventually, the seed of doubt grew and I sold what I had and made a profit of about $500. Then I saw the explosion of 2013, when the price reached $1,000, and I began to sense my mistake. To understand the real value of the instrument. To invest. During this adventure, I heard the sirens sing the same song, again and again, but I have not fallen for them again. I have seen the bitcoin rise and crash with an impressive volatility, even going down to 200 dollars after the MtGox scandal, but I have always continued to believe in the project. Those sirens continue to sing unperturbed, monotonously, and continue to do so today, even with the bitcoin at $20,000.

In my opinion, the two criticisms I can honestly find in bitcoin are as follows:

1. Over time, it could be replaced by a better product.

2. It can be legitimately boycotted by official governments.

It was these two critiques that led me to sell the ones I had due to the “incredulous, exaggerated, disproportionate” price of $50.

Regarding the first issue, bitcoin technology is not currently the best and actually has several defects. In fact, there are already qualitatively better products. Despite this, it continues to thrive. This is partly because it was the first of its kind, it is used as a reference, and it is used as a comparative term with respect to any other concurrent. In the world of cryptocurrencies, every one of them is compared with bitcoin, either in terms of the possibility of buying and selling, than in terms of evaluating its value. It has become a standard, and as a result, it is becoming increasingly difficult to replace. It is continuously gaining strength. The attention it receives allows a continuous improvement. Because it has been, is, and will be, constantly improved thanks to the cooperation and coordination of a sufficiently large number of supporters of this cryptocurrency. And, above all, if in the end bitcoin were to be replaced by a better product, a meticulous and continuous diversification of the investment in cryptocurrencies could easily reduce the risk on any currency, allowing investment in the "new era of finance" to remain solid.

Regarding the second criticism, it is necessary to know what bitcoin consists of. It is based on a technology called "blockchain", which is nothing more than a file, structured in sequential blocks, present in an identical fashion in the computer of each user. This file contains not only each personal currency "mailbox" (which in practice is a simple memory register), but also records every transaction that has occurred and cannot be manipulated or manufactured with mathematical certainty, thanks to cryptography. The algorithm that manages the blockchain typically, as in the case of bitcoin, is open source, meaning that it is available to anyone who wants to know and verify it, guaranteeing further quality.

In practice, whoever owns cryptocurrency has nothing other than the key of a mailbox in this file called blockchain. This key, called private key, is a very long code composed of numbers and letters that allows, only those who know it, to spend the currency present in the mailbox. That code represents our purse in an exact manner. Then, another uniquely associated code, called a public key, allows us to enter the coins in our mailbox, in the same way as if it were a banking IBAN.

These structural components makes it very difficult for an eventual government that seeks to obstruct this technology to do so effectively. Its strong decentralization makes it almost impossible to block it, especially if it is intended by an individual entity. The strongest and most powerful governments have failed in their attempt to control drugs, tax havens, evasion, and protection of copyright, just to name a few. Therefore, I see it extremely difficult that they could manage to block a similar phenomenon.

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