Bitcoin for Beginners in Fifteen Minutes – Bitcoin Magazine
This is an opinion editorial by Mark Maraia, author of “Rainmaking Made Simple” and Holly Young, a builder in 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 interested in Bitcoin, weren’t you?” You know you only have a short period of their attention to give them an overview and pique their interest. So how can you give them an understandable view of such a complex, multifaceted subject?
Here are some ideas to choose from for the next time you find yourself in that situation!
Centralization is the enemy of property
Any currency that is centralized can be taken 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 what was in their account to a government haircut in 2015 and 16, or by cutting off your access to your own assets , which has just been shown by America and Britain doing this against Russian companies or individuals during the current crisis in relations around Ukraine. Second, because all our fiat currencies are centralized, this can be done through inflation – the government simply prints more money, meaning that everything you have in your bank account will lose its value – which also effectively robs you of your purchasing power.
Bitcoin is a new type of digital money that will never be issued or controlled by a company or government. It is a new form of money, unlike anything we have ever seen before, and is a hedge against inflation and money printing by central banks in the 21st century. Unlike the US dollar, it is a provably scarce digital asset backed by a wall of real-world encrypted energy. These coins reached parity with the US dollar ten years ago and are now worth 20,000 times more than the dollar.
Because it is both small and totally decentralized, it is deflationary and no one can take it from you as long as you keep it in a warehouse that is not connected to the internet.
What is Bitcoin?
The term bitcoin can actually mean two things: the bitcoin asset (currently worth 20,000 times more than USD) and Bitcoin network which is growing faster than the internet or Facebook or Amazon. The Bitcoin asset travels along digital rails (a shared distributed ledger where a record of all Bitcoin transactions is kept) that is decentralized to tens of thousands of devices and computers. This digital asset is a 21st century savings technology that uses military-grade encryption and allows you to store value and wealth on a smartphone or hardware device called a wallet.
It allows those who buy it to store the fruits of their labor (or life force) and wealth using software, mathematics and energy that is almost impossible to steal directly or indirectly (through inflation) When you first learn the language of bitcoin, you realize that anyone who has government issued currency (which is all of us) watch their wealth melt like an ice cube in the sun as fiat value is inflated, 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 a legacy) needs to wake up and smell the coffee. Fiat currencies lose their value quickly, and while Bitcoin is still volatile, every indication is that it will hold its value for the 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 the name suggests, a blockchain is made up of blocks. Each time a new block is confirmed, it is added to the blockchain. Bitcoin blocks are confirmed by computers known as miners and every time a miner solves the math problem that confirms a block, it is rewarded in new Bitcoin, a process written into the original Bitcoin code. This takes a lot of energy and is the system that keeps the Bitcoin blockchain safe.
Bitcoin mining is the energy-intensive process that 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 releases 6.25 coins into the network approximately every 10 minutes. In 2024, supply issuance will be halved to 3,125 coins every 10 minutes.
Every time a Bitcoin transaction is made, it is recorded in the next block. Once the block is confirmed and added to the blockchain, it can never be deleted.
Who Uses Bitcoin?
More and more people are using Bitcoin. It is 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?”). There are a lot of people and a lot of growth.
Bitcoin is the first and only digital asset to be named 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 one. So we have two businesses. One is the enterprise software business and the other is the digital real estate business. So why did we do that? Defensively, I don’t want to lose money or destroy the value of the company. Wealth is broken. Step two is opportunistic, we can buy high quality real estate. Digital real estate is better than analog real estate. Step three is strategic. It’s a good idea to buy up cyber Manhattan before everyone else moves here. If bitcoin increases by 100 % per year and I can borrow fiat at 5%, my arbitrage is 95%. Why would I NOT do that?”
There is a lot of negativity about Bitcoin in the press
If we look back in history, it has been quite rare that a king has been dethroned by a newcomer without a bit of a fight. The fiat banking system has been king almost since it was invented by the Medici. It will not go quietly. The Fiat system has been able to dictate the terms and its employees profit massively from doing so. Until that is, until 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 authorities like it? They don’t.
It is a key reason why central bankers attack and spread falsehoods about bitcoin.
What are those lies? It is not supported by anything. It wastes energy. It is fleeting. It is controlled by billionaires. It has no practical uses. It is primarily used by criminals and terrorists. It’s a Ponzi scheme.
Garbage. Bitcoin has the potential to disrupt the current status quo – which is why it is 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 that we can spare to buy a whole Bitcoin. A Bitcoin is divided into one hundred million Satoshis – which means that you can invest $10 in Bitcoin as an initial investment, should you wish to.
“Bitcoin is our peaceful weapon 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 the opinions of BTC Inc or Bitcoin Magazine.
