Here are the basic facts you need to relay to newbies when they’re wanting to know about Bitcoin.
This is an opinion editorial by Mark Maraia, author of “Rainmaking Made Simple” and Holly Young, a builder within the Portuguese Bitcoin community.
We’ve all been there. You’re at a social event and a friend, acquaintance or relative comes up to you and says “you were into Bitcoin, right?” You know you only have a brief period of their attention to give them an overview and pique their interest. So how can you give them an intelligible take on such a complex, multifaceted subject?
Here are a few ideas for you to pick and choose from for the next time you find yourself in that situation!
Centralisation Is The Enemy Of Property
Any currency which is centralized can be taken away from you in two ways. It can be done directly, by simply skimming it off your bank account as happened in Greece when people lost 20% of whatever was on their account to a government haircut in 2015 and 16, or by cutting your access to your own assets, as has just been shown by America and the U.K. doing this to Russian corporations or individuals during the current crisis in relations around the Ukraine. Secondly, because all our fiat currencies are centralized, this can be done through inflation — the government simply prints more money which means that whatever you have in your bank account will lose its value — also effectively robbing you of your purchasing power.
Bitcoin is a new kind of digital money that will never be issued or controlled by a corporation or government. It is a new form of money, unlike anything we’ve ever seen before and is a 21st century hedge against inflation and central bank money printing. Unlike the US dollar, it is a provably scarce digital asset that is backed by a wall of encrypted real world energy. These coins reached parity with the U.S. dollar ten years ago and are now worth 20,000 times more than the dollar.
Because it is both scarce and totally decentralized, it is deflationary, and no one can take it away from you as long as you keep it in a storage which is not connected to the internet.
What Is Bitcoin?
The term bitcoin can really mean two things: bitcoin the asset (currently worth 20,000 times more than the USD) and Bitcoin the network which is growing faster than the internet or Facebook or Amazon. Bitcoin the asset travels along digital rails (a shared distributed ledger where a record of all the Bitcoin transactions is kept) that are decentralized onto tens of thousands of devices and computers. This digital asset is a 21st century savings technology which uses military grade encryption and permits you to store value and wealth on a smartphone or hardware device called a wallet.
It allows those who buy it to store the fruit of their labor (or life force) and wealth using software, math and energy that is almost impossible to steal directly or indirectly (through inflation) Once you learn the language of bitcoin, you realize that anyone holding government issued currency (which is all of us) is watching their wealth melt like an ice cube in the sun as the fiat value inflates, and hyperinflated when measured against bitcoin. Anyone who cares about keeping their wealth in the future ( and that should be all of us, especially those of us who have children and intend to leave them an inheritance) needs to wake up and smell the coffee. Fiat currencies are losing their value fast, and although Bitcoin is still volatile, everything points towards it holding its value long term.
The Bitcoin Network Has Never Been Hacked
In 13 years. The Bitcoin network is rock solid.
How Bitcoin Works In A Nutshell
Bitcoin runs on a blockchain. As its name suggests, a blockchain is made up of blocks. Each time a new block is confirmed it gets added to the blockchain. Bitcoin blocks are confirmed by computers known as miners and each time a miner solves the math problem which confirms a block, it gets a reward in new Bitcoin, a process written into the original Bitcoin code. This takes a lot of energy and is the system which keeps the Bitcoin blockchain safe.
Bitcoin mining is the energy intensive process which both creates new coins and maintains a log of all transactions performed on the bitcoin network since its inception. Bitcoin miners take real world energy (stranded and renewable) and convert it into monetary energy that will outlive your grandchildren. The more energy used by bitcoin miners, the more secure and unhackable the network becomes.
The protocol has a fixed supply schedule that issues 6.25 coins into the network about every 10 minutes. In 2024 the supply issuance will be cut in half to 3.125 coins every 10 minutes.
Each time a Bitcoin transaction is made, it’s recorded into the next block. Once that block is confirmed and added to the blockchain it can never be deleted.
Who Uses Bitcoin?
More and more individuals are using Bitcoin. It’s been estimated that in the first half of 2021, the number of people using Bitcoin grew by just under 165 per minute (“How Fast Is Bitcoin Growing?”). That’s a lot of people and a lot of growth.
Bitcoin is the first and only digital asset to be named as legal tender by a nation state. Bitcoin is the first and only asset in history to be named a primary treasury reserve asset by a Fortune 500 company, Microstrategy, an intelligence software company.
Here’s what their CEO, Michael Saylor, had to say about it:
“We converted our balance sheet from a depreciating asset to an appreciating asset. So we have two businesses. One is enterprise software business and the other is digital property business. So why did we do it? Defensively, I don’t want to lose money or destroy the value of the company. Wealth is destroyed. Stage two is opportunistic, we could buy high quality property. Digital property is better than analog property. Stage three is strategic. It’s a good idea to buy up cyber Manhattan before everyone else moves here. If bitcoin is appreciating at 100% per year and I can borrow fiat at 5% then my arbitrage is 95%. Why would I NOT do it?”
There’s A Lot Of Negativity About Bitcoin In The Press
If we look back at history, it’s been pretty rare for a king to be deposed from his throne by a newcomer without putting up a bit of a fight. The fiat banking system has been king almost since its invention by the Medici. It’s not going to go quietly. The fiat system has been able to dictate the terms and its employees profit massively from doing so. Until, that is, Bitcoin came along, the upstart King Arthur who, against all odds, has pulled the sword from the stone. And do the central banks and the governments like that? They do not.
It’s a key reason why central bankers attack and spread untruths about bitcoin.
What are those lies? It’s not backed by anything. It wastes energy. It’s volatile. It is controlled by billionaires. It has no practical uses. It’s primarily used by criminals and terrorists. It’s a Ponzi scheme.
Rubbish. Bitcoin has the potential to upset the current status quo — hence why it’s so maligned by those currently holding the microphone.
You Can Buy A Fraction Of A Bitcoin
Sure, most of us don’t have 20,000 odd dollars just lying around which we could spare to buy a whole Bitcoin with. One Bitcoin divides into one hundred million Satoshis – which means that you can invest 10 dollars in Bitcoin as a start investment, should you so desire.
“Bitcoin is our peaceful weapon of choice against central bank driven time theft.” — Ross Stevens
“Bitcoin is a currency for the people backed by the people.” — Sylvain Laurel
This is a guest post by Mark Maraia and Holly Young. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.