What is Bitcoin?
An honest financial system open to all which remains fair and true.
I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can’t stop. - Friedrich Hayek
Bitcoin is not just “digital money”, as most people like to think about it. With the rise of credit cards and then internet banking, money has been primarily digital for some decades already, with arbitrary numbers on a screen representing value denominated in various fiat currencies around the world.
Bitcoin, bought and sold as ‘BTC’, is peer to peer electronic cash - which means that it is value which can be sent directly from one person to another as the final settlement, which is unlike credit cards which usually take a number of days for final settlement to occur, and go through various banks and third parties in order to settle transactions.
The risk that the third party poses to our financial system is large, as transactions can be declined or reversed at those third parties’ discretion which has led to about 44% of American credit card users reporting two or more fraudulent transactions in 2022 amounting to upwards of $12 Billion in attempted fraudulent transactions last year, as well as financial suppression for individuals who have opinions that those third parties (or governments with power over them) do not like, which was seen in the case of the Canadian truckers who were expressing their opinions by protesting peacefully in 2022, or in the case of Kanye West in which he went on a seemingly racist/anti-semitic tirade.
It is not a matter of support for these individuals, or their opinions and expressions - it is a matter of principle. The principle is simply that if you have earned money, it should be yours and yours alone to control. Most people are de facto forced into leaving their money with banks, because we are forced to pay our taxes using the banking system and paid salaries into bank accounts, and it is inconvenient and dangerous to carry wads of cash around everywhere - and as such people are left vulnerable to such controls on their hard earned money.
Most people think that they have nothing to worry about because they do not express their opinions on anything online or anywhere publicly, and that is an understandable position to be in, however with the shifting political climate and ever expanding government reach, how long is it until something affects you to the point that you feel compelled to speak out? Covid-19 related restrictions, censorship and suppression have been a rude awakening for many people in this regard.
Bitcoin, on the other hand, is open to all and does not discriminate against anyone based on their political views, ethnicity, gender or anything else about an individual; and no one can stop you from using it; however as a result of the flaws of the traditional banking system they can stop you from purchasing bitcoin with your fiat money, primarily out of fear that everyone starts using Bitcoin instead of their systems, though the rhetoric will say it is to protect you.
Bitcoin is simply an open source protocol. It is the ultimate expression of free speech; translated into the ability to send value to anyone, anywhere for a fraction of the cost of the traditional banking system. It is code, that anyone can download, read, run and use for themselves if they so wish.
People often ask, if Bitcoin is open source - then what stops someone from simply copying the code and launching a new version - which is essentially what most alt-coins are today; albeit the more successful ones also have various changes which weaken its properties in different ways, which I shall discuss at length in another article. The reason why this isn’t possible is due to the network effect: the many millions of people who already use and add value to Bitcoin today would be unwilling to accept the new network as legitimate. In addition to that, it is the proof of work aspect. At the time of writing there are about 400 exahashes per second of work done for the Bitcoin network, and more than 10 gigawatts of energy which provide security to Bitcoin, that protects it from attacks to the level that even nation states cannot disable or disrupt, whereas a clone of Bitcoin will not have nearly the same levels of security and would be vulnerable to attacks from its outset; even more so if it gains some traction. Bitcoin was able to avoid this because it was the first, and as such before people understood it, they ignored it until it grew beyond the reach of any of these attacks.
Bitcoin is fundamentally honest money; it has a fixed supply so that you know that whatever amount of the infinitely divisible of bitcoin you have obtained, will always be exactly that amount divided by 21 million (total bitcoin supply) of the total network, so it cannot steal your value over time as fiat money does through inflation by money printing and credit expandsion. It cannot cheat, change its monetary policy or commit fraudulent transactions as happen all too frequently in the traditional banking system.
You can truly own honest money. You can protect your value by taking self-custody of your bitcoin; you can spend it without restrictions; its supply will not be inflated and you can audit the entire system yourself in a number of minutes whenever you would like. It is open, honest and designed to preserve your value, economic freedom and be accessible to all people.
Bitcoin is truly the first ever truly inclusive financial network in the world, where you cannot be restricted from using it for not having a job (as required to open bank accounts in many places), having controversial opinions or for being of any particular marginalised group whatsoever.
If you don’t believe me, verify it for yourself. Read the white paper; buy a small amount of (or as much) bitcoin for yourself and try to send it to a wallet you create such as Sparrow, a desktop wallet. Try the lightning network with a wallet like Phoenix, which makes transactions near instant and incredibly cheap using Bitcoin.
The freedom and sense of security it brings is refreshing.