Bitcoin is sooooo interesting. It is probably the most interesting thing I have ever encountered in my life.
And it sucks!
Do you know why?
Because the word Bitcoin holds a lot of weight these days to most people…which is hmm… both good and bad, but mainly bad.
It’s good because people know about it. It’s bad because most people I talk to, think that Bitcoin’s sole use and purpose is for making easy cash through trading,…some people even see it as a tool used for committing some sort of crime, or they think it’s a scam.
The truth is that Bitcoin is much more than that!
It is in its simplest terms, a set of code. Because of its complexity, I think a lot of people tend to ignore it. Or they only see the propaganda that surrounds it.
But complexity is part of nature, complexity is part of the financial system that is in place today, and complexity is the reason why you can watch cat videos on the internet, and why you can read this little blog and why you can understand it (imagine a graph of all the synapses of your neurones going off like fireworks as you read this).
Complexity is a taco! A taco with years of culinary research, trial and error, guacamole and lime, and the delicious Mole which can include up to 100 ingredients in the making. Complexity is not really the issue I don’t think. We are existing on the cognitive layers of research and conclusions from our ancestors, like farmers working on the top layer of the soil, 6+ thousand km away from the core of the Earth. Complexity is good!
So what is Bitcoin, and what keeps it from becoming adopted at a worldwide scale?
The Bitcoin Protocol was debuted in a (white) paper officially published in 2008 by Satoshi Nakamoto titled ““Bitcoin: A Peer-to-Peer Electronic Cash System.” Nobody knows who Satoshi is, which is part of the mystery of Bitcoin. Satoshi Nakamoto is a pseudonym and the paper could have been written by one individual, or a group of 2 or more people! Who knows.
When I read the white paper, what became apparent to me was that, whoever wrote this had years and years of experience in cryptography and software engineering. Simply genius. Bitcoin is a disruptive innovation in the field of cryptography and finance. Just like the iPhone revolutionized the mobile phone industry, the Bitcoin technology is a restructuring of a financial medium of exchange. It is also, in my opinion, the culmination of cryptographic technology research and the need for ethical sound “money.”
Before Bitcoin, I never really questioned the financial system. I just accepted it as our system in place and focused more on understanding it in order to pass my economics classes back in school, and to make more money through investments etc. It wasn’t until Covid hit, that I really started to question things around me.
When I attended my first Bitcoin Meetup, a speaker named Seb Bunny, said something that I simply could not erase from my head. He said, if the entire history of humanity were written into a book, the history of our financial system today would be like …5 pages…like…less than 5%.
This kinda shook me. I never thought about a time where money didn’t exist, let alone when strange financial instruments like derivatives and things such as inflation didn’t exist. I just accepted it. I just accepted it, in the same way that women accepted the hegemony of men years ago.
When you think about it, the financial system is super complex today, and sorry to be the one to tell ya… as if you didn’t already know, but banks and other financial institutions aren’t putting us, little people …first.
And isn’t this what Covid did for us, it showed us everyone’s true colors! Every system’s real intention.
The incentives of the current financial system are skewed in favor of the few people in control of them, and I simply don’t want to keep supporting this one bit!
And honestly, unless you are a banker, you shouldn’t either.
The corruption of the financial system has a domino effect on so many other industries, and on so many people. It is terrible, we all know it! Everyone saw it with Enron, but somehow we are too scared about our future children’s survival that we go and reach for the S&P 500. I don’t have anything against investing in companies, in fact I’ve lost thousands on my little app Wealthsimple (you probably have too eh!), I have a problem with the system that promises to return wealth, when they are actually stealing it, through their own negligent management and pyramid scheme structure.
Yo….fuck…. that… shit.
It’s about time there was an alternative.
At face value, Bitcoin is just code living inside a self sustaining eco-system; cash is just paper, acting as a symbol of value. We use them to exchange goods and services.
Currencies, whether they are traditional (like the U.S. dollar or Euro) or digital (like Bitcoin), generally have several key properties that allow them to function effectively as a medium of exchange, store of value, and unit of account. Here are the key properties of currency:
Divisibility: A currency should be easily divisible into smaller units to facilitate a wide range of transaction values. For example, the U.S. dollar can be divided into 100 cents.
Durability: The currency should be able to withstand wear and tear. It should have a reasonably long usable life. Physical paper money and coins are manufactured to last for many transactions, and digital currencies exist as long-lasting records on their respective blockchains.
Portability: People need to be able to easily transport the currency. Coins and paper bills are lightweight and compact, while digital currencies can be stored in digital wallets and transported electronically.
Uniformity: Each unit of the currency must be the same as every other unit. This ensures that all units are accepted at the same value when used in transactions.
Limited Supply: For a currency to maintain its value, its supply should be limited or controlled. If too much is produced (as in the case of excessive printing of money), it can lead to inflation, which decreases the currency's purchasing power.
Acceptability: For any currency to be effective, it must be widely accepted as a medium of exchange for goods and services. This means that a significant number of merchants and individuals must recognize and trust its value.
Cognizability: People should be able to easily recognize and distinguish the currency from other items. Modern banknotes, for instance, have various security features to ensure they are genuine.
Security: The currency should be resistant to counterfeiting and fraud. Many national currencies have intricate designs, watermarks, and other security features to prevent counterfeiting. Digital currencies use cryptographic methods to ensure the security and authenticity of transactions and coin ownership.
Stability of Value: A good currency should have a relatively stable value over time. Severe and frequent fluctuations in value can make a currency less useful as a medium of exchange and a store of value.
Fungibility: This means that individual units of a currency are interchangeable. For example, one $10 bill should be interchangeable with any other genuine $10 bill. Similarly, one Bitcoin is equivalent in value to any other Bitcoin.
Bitcoin has all of these, so there is no argument as to whether Bitcoin can be used as a currency.
Inflation has led people to cut back on essentials that they need to live a somewhat comfortable life, like medicines and health care services. Whenever there is a problem with the economy, the first people to feel the consequence are the ones at the bottom of the chain, the ones who work the hardest to stay afloat. It’s disgusting and it is unfair.
Where are the bankers at though?
They’re out there getting mad when they are told they’ll be paying extra for the guac. Disgusting.
Bitcoin is a decentralized network, non-discriminatory, and available to everyone who wants to use it, everywhere in the world. It is literally, financial freedom. You can wire “remesas” from USA to Mexico without facing exorbitant fees that banks put in place to steal from the hard working Mexican immigrants in the USA.
Bitcoin is open source (never forget) a work in progress…It’s not perfect but it includes anyone and everyone, and to be honest…it gives me hope.
I love it, and I will dedicate my professional career to contributing to Bitcoin, because I can sleep at night knowing I’m not contributing to the problem. I can also sleep at night knowing that during a bank run, I wont be lining up outside the bank, trying to get my money back, money that’s not liquid because they’ve decided to gamble with it without any real risk assessment that considered my savings.
I’d like to actually own my money, please and thank you. The only way I can now see that happening, is with Bitcoin.
If you got this far, thanks for reading this and here’s a link to some ideas I’m playing with for fun to make the Lightning Network more efficient!
