As a final parting gift, cryptocurrency news site Cointelegraph has published an article called “The 9 Minute Read That Could Change Your Life.” The list of nine must-read articles ranges from the history of money to economic theory and covers topics like bitcoin’s meteoric rise in value.
The “best cryptocurrency magazine” is an online publication that covers all things related to cryptocurrencies. It provides in-depth analysis on the latest trends and news from the world of blockchain technology.
You’ve undoubtedly heard about Bitcoin by now. It’s possible you’ve heard that it’s made some individuals wealthy. You may have also heard that it is a new kind of digital money that represents the future of business; or that it is a criminal operation that is harmful to the environment.
The message is jumbled and perplexing, in part because no one individual is in charge. Like Bitcoin, which belongs to… well, everyone.
In this brief article, I’d want to provide some background information about Bitcoin for anyone who are interested in learning more about the world’s most popular cryptocurrency. It’s not technical, and it’s not difficult to understand. It’s also not exhaustive, which is why this page is packed with links to help you learn more.
I’m not recommending Bitcoin as a long-term investment, but I do believe it’s worthwhile to acquire a little amount of it. I’m simply trying to clear up a few myths and bring newbies to the Bitcoin community up to speed on a few essential principles as fast as possible. If you read this with an open mind, you’ll immediately see that Bitcoin is about much more than its price.
In the bathwater, there are infants.
Let’s get a couple things out of the way first: Cryptocurrency is a risky and frequently unsightly environment. There are several frauds, hacks, and vulnerabilities out there. Degenerate gamblers, thieves, and foolish are drawn to it. The sunk cost fallacy and motivated reasoning keep faulty ideas alive long after they should have died. Con artists flourish in the open, and regular people lose money all the time. By volume, the crypto sector is 95 percent nonsense, so it’s logical that some people assume it’s all bullshit.
However, a lot of bullsh*t isn’t the same as a lot of bullsh*t. Rejecting cryptocurrency because it is riddled with frauds is akin to dismissing Twitter because the typical Tweet is poor. The issue isn’t that Twitter (or cryptocurrency in general) has nothing to offer. The difficulty is that learning how to sift through the nonsense and locate the really fascinating ideas takes time and effort.
Rejecting bitcoin outright is considerably simpler, and it seems to provide a great deal of moral clarity — but it raises a lingering question: if cryptocurrency is so plainly bad, why doesn’t it simply die?
DotCom and other asset bubbles vs. Bitcoin / https://twitter.com/JamesTodaroMD
Bitcoin isn’t going anywhere.
Bitcoin is intriguing in that nearly no one believes in it immediately away. Bitcoin’s architecture is so unattractive and illogical that practically everyone dismisses it as impractical at first. It took me roughly three years from the time I first heard about Bitcoin to the time I began looking into it seriously. In graduate school, I studied game theory and mechanism design, so I understood precisely why Bitcoin couldn’t function. I couldn’t understand why it was still there.
In principle, I believed Bitcoin could not exist… But it did in practice, and when theory contradicts observable reality, theory must be revised. I began to doubt my own cynicism. I finished reading the whitepaper. I decided to alter my mind.
The history of Bitcoin’s functioning, more than anything I can write or say, is the most persuasive proof that it operates as stated. The longer Bitcoin is around, the more serious you should be about it.
The Lindy effect is an academic term describing the concept that the longer something has lasted, the more likely it is to continue. We may all decide tomorrow that gold is no longer precious and that we will continue to listen to today’s popular songs indefinitely. However, we are unlikely to do so.
Gold has been precious for a long time and will most likely continue to be valuable in the future. The majority of today’s top songs are brand new, implying that the majority of tomorrow’s top songs will also be brand new. Something’s continuing existence is proof that it will continue to exist. That’s what the Lindy effect is all about.
As a result, governments all over the globe have stopped ignoring Bitcoin and have begun to formulate explicit laws to restrict, regulate, or embrace it. Ignoring Bitcoin and hoping it would go away on its own is no longer a viable strategy. If Bitcoin was going to die on its own, it would have done so by now.
Bitcoin is valuable because it is practical.
One typical criticism of Bitcoin is that since it is not backed by anything, it must be worthless. They must be a larger fools’ game, where the sole purpose is to sell your useless bags for a higher price to an even greater fool than you, since they have no inherent value. It’s true that the main purpose of Bitcoin is to send money to other people, but that doesn’t imply it’s worthless. It is an important service to transfer value. That is why the banking industry is so profitable.
“Imagine a base metal as scarce as gold, but with the following characteristics: – dull grey in color – not a good conductor of electricity – not particularly strong, but not ductile or easily malleable either – not useful for any practical or ornamental purpose – and one special, magical property: – can be transported over a communications channel.” Anyone seeking to transfer riches over a great distance might purchase some, transmit it, and have the receiver sell it if it gained any worth for whatever reason.” Satoshi Nakamoto, Satoshi Nakamoto, Satoshi Nakamoto, Sato
Money is a method of transferring value across time and place. Bitcoin is a digital currency that can’t be diluted, seized, or censored, and it can’t be diluted, seized, or censored. Bitcoin’s value is “backed” by the value of that service.
@PatrickMcHenry #btc pic.twitter.com/DY70tx2TvV “I believe there is no ability to destroy bitcoin,” he adds.
July 17, 2019 — Squawk Box (@SquawkCNBC)
Bitcoin is unstoppable.
Because Bitcoin lacks a central point of control, the only method to “stop” it is to individually halt each member of the Bitcoin network. Even shutting down the whole internet wouldn’t be enough since the Bitcoin network may be accessed by radio or satellite. By any reasonable standard, the network cannot be shut down.
Governments may, of course, restrict cryptocurrencies (and a few have), but making Bitcoin transactions illegal is analogous to making drug usage illegal: it doesn’t abolish the practice, but rather drives it underground. Although China is a strong, authoritarian country that has repeatedly outlawed Bitcoin, it is impossible to prohibit Bitcoin from China because Bitcoin has no idea of China. China has no choice except to disconnect from the network.
But what if governments go even farther and target the network directly? They might steal or seize mining equipment and use them to mine empty blocks, delaying the network and cutting earnings for legitimate miners. They might potentially sell the mining profits and create short positions to push the price of Bitcoin down, reducing miner income and market confidence. As miners stop protecting the network, attackers will gain control of more of it, resulting in a death spiral.
Attacks like these are simplest to imagine in the context of a global government that is abstract and monolithic. It’s less obvious how they’d operate in today’s world of real-world governments. In actuality, the US and China are the two most apparent states that might conduct such an assault. China has been striving to remove all mining rigs from its borders, so they aren’t exactly preparing to conduct a network assault based on mining.
China’s $1 trillion blunder: #Bitcoin miners are being deported. pic.twitter.com/wxoO9BMDUy
June 27, 2021 — Documenting Bitcoin (@DocumentingBTC)
America also seems to be an improbable target for a cyber-attack on the network. Taking private property like mining rigs outside of a traditional conflict would be a novel and politically hazardous precedent. In a more practical sense, Bitcoin has evolved into a powerful lobbying force. Members of Congress from both parties hold Bitcoin and have made cryptocurrency support a part of their platforms. It has even become a signature problem for some.
Senators from both parties have sent a letter to Treasury Secretary Janet Yellen, accusing her of not doing her study on #Bitcoin. pic.twitter.com/St4KkMMITj
Dennis Porter (@Dennis Porter_) (@Dennis Porter_) (@Dennis Porter_) (@ 14 December 2021
A sufficiently strong, politically driven assault may bring the Bitcoin network to a halt, but it would be costly to maintain and would not prevent the network from returning to regular functioning after the attack had ended. What occurs when determined attackers and defenders struggle over a blockchain is difficult, and reasonable people might differ about what it means. However, the world’s two most powerful nations are either adopting Bitcoin or systematically disarming themselves.
THREAD:
Many factors distinguish #Bitcoin from other cryptocurrencies. But keep it basic; there’s no need for technical measures.
There are three things to keep in mind: – Digital scarcity is a one-time occurrence – Schelling points – Money is the mother of all network effects, and it prefers to focus on a single image. twitter.com/yBcso6Z66p
March 29, 2021 — Croesus (@Croesus BTC)
Bitcoin is not going away.
Bitcoin is a relatively constrained system (by design). It can essentially only be used to transmit and receive Bitcoin. It is difficult to alter (by design), thus new technology is adopted slowly, if at all. Outsiders may find this unsophisticated and slow, but Bitcoin’s fundamental value proposition is its resistance to change. Making a Bitcoin that is easy to alter will not result in a better Bitcoin.
Bitcoin is more of a social revolution than a technology breakthrough. Because the societal environment in which Bitcoin was established is no longer present, no new cryptocurrency can accomplish the same benefits as Bitcoin. Bitcoin was practically free for the first year and a half of its existence – there was a website called the Bitcoin faucet that awarded users 5 BTC only for completing a CAPTCHA. Satoshi vanished before the project became well-known, and he never received any special founder’s awards for his contributions. Even if a new enterprise could somehow mimic these circumstances, it would be unable to duplicate the history of successful operation.
Other cryptocurrency initiatives may become helpful / valuable in the future, but not through competing with Bitcoin for the title of greatest money. If they succeed, it will be due to the fact that they optimized for a different use case.
They will coexist with Bitcoin rather than replace it.
In a nutshell, Bitcoin performs as expected.
Even naysayers should pay attention to the fact that Bitcoin has been operating constantly free of anyone’s control for more than twelve years. It hasn’t been hacked, banned, stopped, or restricted in any way. It has withstood bubbles and crashes, as well as efforts to seize, prohibit, or obsolete it. That operating history is adding to a growing body of proof that Bitcoin is exactly what it purports to be: a perfectly scarce, sovereign asset.
Because there is a growing amount of evidence that Bitcoin is genuine, sensible people should start preparing for it. What does the availability of a perfectly scarce item that is universally accessible signify for the world?
Image courtesy of Blockdata.tech
Bitcoin is beneficial to individuals.
Bitcoin is sometimes suspected as being primarily utilized by criminals, however this is not the case. Bitcoin criminal activity peaked at 2% in 2019 and dropped to 0.34 percent in 2020. Bitcoin transactions leave a trail that is both permanent and public. The majority of thieves prefer to transact with US dollars. Bitcoin is mostly used to save money.
Bitcoin is beneficial to the poor since they bear the brunt of inflation. Inflation is a drain on your wealth if your net worth is largely cash and future cash-denominated salaries. If the majority of your net worth is made up of investments, property inflation just affects the numbers next to your accounts and costs you nothing. Bitcoin is a safe refuge for the impoverished in nations where inflation is out of control.
Bitcoin is also significant to activists such as Nigerian feminists, Russian dissident politicians such as Alexei Navalny, and marginalized populations such as unbanked women in Afghanistan. The Human Rights Foundation’s Alex Gladstein described it as a “important instrument for safeguarding freedom.”
In two minutes, learn why Bitcoin is important for human rights. pic.twitter.com/7whCGZKEXi
June 24, 2020 — Alex Gladstein (@gladstein)
Bitcoin is beneficial to the environment.
Despite its often negative image in the mainstream media, Bitcoin is really beneficial to the environment. Bitcoin consumes a significant amount of energy, but it is a scavenger that feeds on low-cost waste energy. Energy is much simpler to create than it is to store or move, resulting in significant energy loss.
Oil mining, for example, often creates natural gas as a byproduct. Oil corporations will sell natural gas when it is convenient, but since oil is typically extracted in distant regions, getting it to market is difficult and expensive. Instead, oil corporations simply release the gas into the atmosphere and set it ablaze, a procedure known as flaring. According to CBECI calculations, enough gas is vented worldwide to power the Bitcoin network 6 times over. Here’s how big flaring is in comparison to other carbon dioxide emitters:
GlobalCarbonProject.org image
Several businesses are developing mobile Bitcoin mining rigs that can go to the vents and mine Bitcoin using natural gas on the spot. This increases Bitcoin’s energy consumption, but it has a beneficial environmental effect since utilizing natural gas rather than flaring it is considerably better. Both flaring and consuming natural gas emit CO2, but flaring (which is typically inefficient and incomplete) may also emit methane and NOx into the sky. The ozone layer is damaged by methane, while NOx leads to acid rain. It’s inaccurate to interpret the graph of Bitcoin’s energy use as a proxy for its environmental effect.
Bitcoin mining is also beneficial to renewable energy since most renewable energy is generated during off-peak hours, when it is less profitable. The Bitcoin network works as a “last resort buyer” for energy providers, allowing renewable energy to become more economically feasible. By providing a market for their extra electricity, Bitcoin effectively subsidizes the generation of additional renewable energy. As a result, renewable energy firms are beginning to include Bitcoin mining into their operations.
Many anti-Bitcoin detractors point to environmentalism as a source of worry, but few environmentalists point to Bitcoin as a source of concern, since if you really care about the environment, Bitcoin is a footnote.
CBECI image https://ccaf.io/cbeci/index/comparisons
The amount of energy used might be startling. Bitcoin consumes more energy than Argentina, but less than Christmas lights in the United States. Neither comparison is really meaningful; a better comparison would be the energy consumption of the whole legacy banking system or the petrodollar’s environmental impact. Bitcoin’s energy consumption isn’t as enormous as it seems when seen in perspective.
USD entire node pic.twitter.com/4qs2bDVpMpUSD full node pic.twitter.com/4qs2bDVpMpUSD full node pic.t
May 29, 2021 — Gabor Gurbacs (@gaborgurbacs)
Bitcoin is a non-violent alternative to warfare.
The history of warfare is the history of wealth acquisition and defense. If such wealth is located in a physical place, it will need the defense of physical territory, which implies violence. Nonviolent measures may be used to protect wealth when it migrates to non-physical systems like Bitcoin (i.e. Bitcoin mining). The less wealth needs physical protection, the more money leaves physical things.
Few people are aware of…#Bitcoin pic.twitter.com/PEt8M1vRtz
November 1, 2021 — Jason Lowery (@JasonPLowery)
Bitcoin also makes it more difficult for governments to prolong a lost conflict by consuming the wealth of their populace via hyperinflation. Because people grasp the effect of direct taxes more vividly, it is considerably simpler to support a war via the production of new money than than through direct taxation. As a result, the gold standard had to be abandoned by the majority of the nations participating in World War I. People would put an end to conflict sooner if they realized how much money it costs them.
None of this implies that Bitcoin will put an end to conflict; power stations and population centers will always need to be protected.
Governments will constantly find excuses to squabble with one another. However, to the degree that Bitcoin develops popularity, it reduces the means and incentives for violent conflict significantly.
In any case, you should have some Bitcoin.
Even if you are skeptical about the worth of Bitcoin after considering all of the reasons presented here and in the first article, you should definitely still acquire a small amount of it. That’s because, if Bitcoin succeeds in becoming the greatest feasible means to hold wealth, it will grab the vast majority of the value presently held in other forms. Not only will the price of Bitcoin increase, but the worth of everything else will decrease as well.
That is why, whether you favor Bitcoin or not, everyone should consider how they would protect themselves if Bitcoin turns out to be genuine. One approach to mitigate that risk is to own a tiny quantity of bitcoin — and you probably don’t need as much as you think. If everyone wants bitcoin, there won’t be much of it to go around – having 0.074 BTC (about $3,400 at the time of writing) would likely place someone in the top 1% of Bitcoin wealth.
This figure is based on current worldwide wealth disparities. I have created a spreadsheet where you can test and change your assumptions.
Given how little bitcoin it takes to hedge against a Bitcoin future, holding no Bitcoin at all is really a very confident position. It’s acceptable to be skeptical about Bitcoin’s chances of success, but it’s overconfident to be certain it will fail. Skeptics who are intelligent are dubious about their own skepticism.
Keep an open mind.
Regardless of your feelings towards Bitcoin, I advise you to keep an open mind. Since 2014, I’ve been immersed in space, and I’m continually learning new things and changing my thinking on a daily basis.
If you’re interested in learning more, I’ve compiled a reading list of important articles that I believe are well worth your time. This item initially published in this email (Something Interesting) – I write on cryptocurrency news and subjects every two to three weeks, and I attempt to respond to all reader queries.
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The “blockchain magazine” is a publication that provides information on the blockchain and cryptocurrencies. The publication has been around for over 10 years, and it’s been one of the most popular publications in the cryptocurrency space.
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