How to Bitcoin
Part 2. What is money, and why Bitcoin?
Before embarking into the technicalities of how Bitcoin works (and how to use it) it´s important to know why we use it. Why is Bitcoin money? Why is fiat not real money? Why are the systems and structures of the fiat world so crooked, and why is Bitcoin so important anyway?
We often reserve this simple question for small children, but in this space we insistently invite you to ask: why? If you can´t see the why in it, you will not endure the how.
The four characteristics of universal value (money)
- Durable: the medium of exchange must not weather, fall apart, or become unusable. It must be able to stand the test of time.
- Portable: relative to its size, it must be easily moveable and hold a large amount of universal value relative to its size.
- Divisible:should be relatively easy to separate and put back together without ruining its basic characteristics.
- Intrinsically Valuable: should be valuable in of itself, and its value should be totally independent of any other object. Essentially, the item must be rare.
Take a closer look at your dollar
With the four points above in mind, contemplate your local fiat currency. Is it intrinsically valuable? Is it scarce (i.e. in limited supply)? Why are people willing to exchange real products and services for it? Why are you?
When the US terminated the convertibility between the US dollar and gold in 1971, it brought an end to gold standard. Now there is no limit to fiat printing, and the value is backed only by the authority of the state, and our faith in it. After 50 years of systematic fraud, fractional reserve lending, and the acquisition of most of the real-world wealth by a small few, we are finally experiencing hyper-inflation, and the dawn of a global financial collapse. Powerful global predators call it The Great Reset, and it´s all by design.
Bitcoin is money... reinvented
Bitcoin is durable. Backed by a network of over 100,000 nodes, all individually recording and verifying transactions on its public ledger. It is robust under extreme attacks and conditions. Bitcoin is able to stand the test of time.
Bitcoin is extremely portable, and this is its key advantage over it´s equally important piers; physical gold and silver. The value equivalent of thousands of ounces of gold can be sent across the world in a matter of minutes, for the price of a bunch of bananas. In the same manner that gold and silver champion stability, Bitcoin champions liquidity.
Bitcoin is divisible. The smallest unit of Bitcoin is one Satoshi. 100,000,000 Sats is equal to 1 Bitcoin. This makes micro-transactions possible, and is already making previously unthinkable systems and services a reality.
Bitcoin is intrinsically valuable. There is a deliberate scarcity to the amount of Bitcoin which will ever exist, with a firm maximum of 21million in circulation. It requires energy and time to “mine” Bitcoin, just as it requires energy and time to mine gold. Bitcoin is a store of captured energy through physical work. We call this Proof of Work. Bitcoin is unique in that it is the first native currency of the internet, and creates a physical anchorage between cyber space and reality. This is intrinsically valuable.
More reasons why:
- Bitcoin is decentralized: Bitcoin is not controlled by any central authority, and operates on an open and permissionless network, held together by the public consensus of its worldwide users.
- Bitcoin represents freedom: Bitcoin is freedom money. Without borders, and third party custodians controlling your assets; when you use Bitcoin, you become your own bank.
- Bitcoin (done right) is anonymous: Bitcoin gives us the ability to transact privately. Furthermore, emerging privacy-oriented technologies, built on the Tier 2 Bitcoin Lightning Network, enable us to communicate via encrypted instant peer-to-peer messaging through the blockchain. However, this is beyond the scope of this course.
- Bitcoin is honest: Bitcoin is fully transparent, and is continually recording a public record of its whole history since its creation. Anybody can verify the legitimacy of a transaction, because Bitcoin is a public ledger.