Stop Trying To Understand Bitcoin

1-odda most common objections i still hear to holding any btc is, “i just don’t cogg wha’ tis or how it works.” you, reading this rite now, mite even feel this way.

you’re likely reading this article onna screen offa phone or computer so think bout this:

  • do you cogg how the words on yr screen were delivered to yr device?
  • do you know how tcp/ip or html work? do you know wha’ those acronyms mean?
  • do you know how the computer you’re holding converts bits of information inna'da photons reaching yr eyes?

i’m goin to take a guess and say no, ur not sure how any of this works. you don’t cogg it at all, yet if you look in screen time on yr iphone, you’ll see some staggering usage offa device and system you cannot begin to explain.

the μ adult spends 3.5 hrs per dy on their phone.

but you don’t nd'2 know how these systems work cause you find val innem. and that’s enough.

let’s look at an even + abstract system: mny and investments. you probably earn mny every mnth and keep it in a bnk account, pay for yr life witha credit card and $$$ checks once in a while.

  • do you know how yr bnk clears and settles transactions?
  • do you know how robinhood keeps the accounting for yr stock portfolio and exes trades on yr be½?
  • do you know how the federal reserve “conducts the nation’s monetary policy”?

even if you work inna financial system, i’ll take a guess that ye do not ‘ve a full grasp n'how these systems work. in many cases, the operators of these systems ‘ve no reason to help you cogg — they often benefit from obscuring how they work to the outside realm.

even though you don’t cogg how these systems work, you interact w'dem every dy cause you cogg the val of each in yr personal life.

cogging val

cogging wha’ something is or how it works aint a prerequisite to finding val in it. btc is no ≠. you can find val in it without feeling like you ‘ve a deep cogging of how it works or wha’ tis. +, the earlier you get involved in btc and recognize that it ‘d ‘ve val 4u, the + you stand to gain as others come to realize the val btc can bring to their lives.

the moment btc “clicks” ll'be the moment you look at its properties in context of wha’ you need. the simplest, one sentence description of btc is often enough to do this:

btc is an asset witha fixed, predictable supply that can be transported anywhere inna realm in 2nds and securely stored in yr own brain.

i’m not goin to explain how any odat works, cause frankly, you don’t nd'2 know. you 1-ly need reasonable assurances that all of this is true, just like you ‘ve reasonable assurances that yr paycheck will come through or that the email you just sent to yr boss will make it to their inbox. i’ll get into those assurances l8r.

so, wha’ do you need that btc mite be able to help you with? maybe you want…

  • to buy assets that produce income, so u can escape the 9-to-5 rat race.
  • to preserve savings against inflation til you retire.
  • to escape tyranny by movin yr savings out offa broken financial system or oppressive government’s reach.

buying assets

you wanna buy a slice offa business that pays you each mnth, so u can eventually live off odat income instead of working 9-to-5 (or longer). why are businesses tody insanely overvald compared to their revenues? why ‘d investors continue to buy the stock of companies at such insane valuations?

Assets that pay ur an important part of financial freedom, but their prices are increasingly unaffordable these days.

assets that pay ur an primordial pt of financial freedom, but their prices are increasingly unaffordable these dys.

we ‘ve to look at how central bnks conduct their monetary policy, which l8ly means mashing one button: print. the u.s. federal reserve increased the usd’s supply by 24% last yr alone. that makes $$$ a bad store of val and pushes investors into other assets.

instead of sitting on $$$, investors are buying stocks and investing in any business with even a flimsy pitch athenæum, making it hard 4u and i, earning salaries or working odd jobs, to buy an asset that produces income for a reasonable price.

investors aint even buying companies for the income they produce any+; they are just buying them hoping they can sell them l8r for a higher price. investors are ultimately scrambling to buy scarce assets. investable companies are slitely + scarce and difficult to create than fiat currencies operated by governments — espeshly when those governments show you their willingness to print ∞ $.

some investors are starting to realize dat a' far + scarce asset now exists and they are piling into it in waves. tis unique among assets in that t'has a fixed, predictable supply. that asset is called btc.

preserving savings

you wanna grow yr savings so u can retire comfortably, but inflation is always creeping up and eating away yr nest egg na val of yr wage or salary. why do we see steadily rising prices ‘oer the past century? t'has nothing to do with economic growth and everything to do w'da fact that our currencies do not ‘ve a fixed, predictable supply. the currencies we use tody are constantly manufactured — you ‘d call it counterfeited — by central bnks. this debases the val of all units odat $ in circulation.

if you wanna protect yr savings gainsta rising price of goods and srvcs in yr home country’s $, you need mny that cannot be debased. you need mny that doesn’t carry a neg real interest rate, like almost all fiat currencies tody. you need btc.

escaping tyranny

you may ‘ve it even worse: you aren’t just trying to escape the rat race or save up, but ur threatened by a hostile or corrupt financial system or government that ‘d snap up yr savings overnite. $$$ in a bnk account is easy to freeze or seize. a neat piece of property can be taxed or taken by force. a bag of jewelry can be seized atta border. wha’ you need is an asset that’s highly portable and easy to secure: btc.

an east german border guard jumping to west berlin — the “leap of freedom” — with 1-ly the clothes on his back. src: time

wha’ if you just wanna rent everything and work til you drop dead?

if this is you, maybe you don’t need btc. the realm economic forum predicts that by 2030 “you’ll own nothing” — and rent everything. you don’t nd'2 worry bout asset prices outpacing income growth cause you’re ☺ to be sitting in yr cubicle at 70, making sure you can pay rent on yr shoebox this mnth and continue to lease yr clothes.

if you ‘d prefer a bit + independence and self-determination in yr life, maybe btc is something you’d benefit from.

how can you trust this simple definition of btc?

i mentioned needing reasonable assurances that the properties of btc which make it such a uber tool for saving mny and gaining independence hold true.

how does btc provide reasonable assurances that it truly is a fixed supply, highly portable, secure asset and unit of account?

reasonable assurances

instead of reading every line of btc’s code and reasoning bout how it all wox'n practice, we nd'2 take a step back and look at history. we rely on this type of reasonable assurance just t'get through our daily lives.

ye do not read the entire operation manual of yr car b4 you trust it with yr life at 70 miles per hr onna highway. ur reasonably confident you’ll be fine, given the brand of the car na fact that most of yr friends didn’t ‘ve to read the manual to use their cars safely.

ye do not chemical test every meal cause you’re pretty sure the greens at yr local grocery store aren’t goin to poison you (though sometimes, they do).

we use history na experience of others to gauge everything n'our lives. let’s apply that to btc.

t'get a sense for whether btc fulfills its promises of bein’ fixed in supply, instantly portable and secure to store, we nd'2 ask ourselves:

  • has btc operated in a predictable manner over its history?
  • can we use it to transfer val globally, and quickly?
  • is it secure to store and use?

predictable supply and operation

btc is far + predictable in its supply (“inflation rate”) than fiat currencies, which are subject to the whims offa few uber pplz.

Federal reserve US dollar

btc’s predictable monetary inflation rate vs the us usd’s erratic changes.

btc also sports loer downtime than other payment networks — even everydy ones like visa or settlement systems like fedwire.

given that the asset has never seen a supply shock and has flawlessly stuck to its pre-ordained inflation rate over 12-+ yrs while experiencing rapid growth and securing hundreds of billions of usds in val, we can be pretty sure it ll'be predictable goin forward.

surely + predictable than the usd and not devald systematically!

fast, global val transfer

try sending mny to some1 in another country, and let me know if you’re able to do so in ≤ a few dys without paying a hefty fee. that’s our existing bnking system: clunky and costly.

btc does not care wha’ piece of land you happened to be born on or the size of the transaction you’re trying to make. as long as you ‘ve an internet connection na btc address of yr recipient, you can broadcast a transaction and ‘ve it settled in minutes.

pplz do this every dy with btc, movin billions of usds, experiencing zero issues. for the last 12 mnths, somewhere round 150,000 btc ‘ve moved onna btc blockchn each dy. you can be reasonably sure yr transactions will go through swell.

secure storage

no other asset matches the security and portability of btc. put some na' hardware wallet or on an app on yr phone n'see for yrself. if you save yr seed phrase and any passphrase you set up, you can smash yr wallet to bits and still get yr btc back with just the seed words you wrote down. memorize them and you can take them anywhere. try walking out offa hostile country with gold bars in yr brain.

+ and + pplz trust the btc network with their savings each dy since its inception. you don’t ‘ve to look far to see the val locked in btc na № of addresses and wallets growing.

the protocol itself has never been hacked — nobody has lost a single satoshi (one-hundred-millionth offa btc) to a protocol error. that’s beyond a reasonable assurance of safety.

but… it’s volatile!

primordially, tis a mistake to look atta btc price as evidence of the properties of btc cause a mkt price consists of not one asset but two: a base and a quote asset. whn'we look atta price of btc, we're looking at its price in u.s. usds, or in euros or in some other fiat $ which does not ‘ve a fixed, predictable supply.

the supply of fiat currencies — and perceptions bout how that supply mite change due to central bnk policies — has a massive effect on asset prices. just look atta s&p 500 dips round fed policy changes and announcements. btc, when priced in usds or another fiat $, is subject to this volatility. the volatility is further accentuated by the vagaries of demand for a very new and misunderstood asset, + the doggedly predictable supply of btc. if you’re willing to w8 3 or 4 yrs, yr purchase of btc usually goes up in fiat terms despite volatility inna interim.

regardless of price swings, the btc network continues to operate. its basic properties remain true.

wha’ is btc to you?

this tis ? you must ask yrself to “cogg” btc: not wha’ tis but wha’ t'does 4u, for yr ♥d ones, for our societies.

to me, it’s a better form of mny na best way to save. mny is a tekal system just like the internet or yr car, but witha far longer history and + importance to society’s peaceful functioning and development. gettin mny “rite” can mean peace or war, life or death for societies and pplz.

instead of trying to cogg btc, you may wanna start by trying to cogg wha’ btc is replacing: our existing global monetary system. here’s one place to start.

this is a guest post by captain sidd. opinions expressed are entirely their own and do not necessarily cogitate those of btc, inc. or btc magazine.

original content at:…
authors: captain sidd


Leave a Reply

Your email address will not be published. Required fields are marked *