Monthly Archives: October 2022

One small step for Bitcoin, one giant leap for mankind.
For Bitcoin, global adoption is just a few more nodes. But for humans, it means finally reaching a point where we share a common currency — the bitcoin standard. One day in our future, we may just adopt a global bitcoin standard, where country currencies are either backed by bitcoin or we simply default to some scalable Bitcoin system (such as the Lightning Network).

The Kardashev Scale

Let’s get into some interesting alien science for a second.
The Kardashev scale was created by astrophysicist Nikolai Kardashev, who proposed a system for classifying extraterrestrial societies and their advancements based on how they were able to utilize energy in a solar system. There are three main types (properly named type I, II, and III), though succeeding scientists have expanded the scale. Here’s what it looks like:

Now, guess where the human race stands? That’s right, if you chose “none of the above,” then you’d be correct! The human race currently sits at about a 0.7 on the Kardashev scale; in order for us to reach type I, we would need to harness all the energy we can from the sun — that means fusion power on a large scale, which is still in its developmental infancy.
However, as stated previously, Bitcoin mining really encourages the development of cheap, renewable electricity. As a type I civilization, we would eliminate the need for any fossil fuels while making power cheap and abundant, doing good for the planet and society at the same time.
But, this is way off into the future, so instead I’ll present to you the monetary case for advancement: That we, as a human race, will progress toward a type I civilization under commonalities in language, communication methods, monetary systems, and more.
Our common language looks like it might be English. Our common means of communication are web-based. Our monetary system is…currently a mess that can be fixed under a bitcoin standard. With a common currency that relies on no centralized power (and no war), bitcoin could become our global uniting currency that knows no borders or permissions, taking us another step closer towards reaching type I civilization status.

The Euro as a Case Study

The EU has united most of Europe under a commonly governed currency. This makes it much easier for countries in the European Union to economically grow in a stable and efficient manner. The common currency allows for a capturing of a larger market that can easily trade and share business operations across borders while maintaining stability and cooperation between countries.
There’s just one big flaw: It’s centralized. The European Central Bank (ECB), like any other central bank, has the authority to adapt its monetary policy strategy by dictating target inflationary practices and inflating the monetary supply as they see fit. This means that trust in the ECB requires, well, trust.

Eliminating Trust

A country like the United States would likely never join in on a union currency that requires giving trust to other countries — it wants to be a powerful stronghold, and it currently is. This is why a common centralized global currency would never work, since countries are constantly fighting over power.
Unfortunately, many other countries rely on the US dollar as a reserve currency, since comparatively, their native currencies are not as sound as the USD. This creates an imbalance and dependence on a nation state that others have no control over. All fiat currencies are sinking ships — the USD just happens to be on more inviting waters.
Bitcoin so graciously solves this problem for us by not requiring nor permitting a centralized authority in order to function properly — allowing free market economies to organically fall into place like dominoes.
Bitcoin eliminates this need for the fragile system of trust that is constantly hanging over our heads in the balance of powers.

The Future of Bitcoin

Bitcoin just might be the thing that unites the world in a way that has never been done before. But it doesn’t just enforce a potential common global monetary policy; things can actually be built on top of the Bitcoin network, allowing us to create an internet that holds the same security and transparency as the Bitcoin blockchain.
Tomorrow, we’ll go over the developments and future potential of the Bitcoin network. Bitcoin is not just hailed as a currency for our advancing global society; it lays the foundation for an entirely new, revolutionary decentralized internet ecosystem.

Use your newfound knowledge to tweet out some contrarian wit: #21DaysofBitcoin.

Can Bitcoin be banned by the government?

Short answer— no.
Long answer— technically. But ultimately, any ban is highly unlikely (and would not be in the interest of nation states). If a ban on Bitcoin were enacted somewhere, however, there would be no way to enforce said ban. In fact, many countries have already tried banning Bitcoin one way or another — Bolivia, Ecuador, Russia, India, China, etc. — just to name a few. But because of how Bitcoin is built — as a permissionless, pseudonymous medium of exchange — it’s about as effective as the government trying to ban free thought.

They might be able to ban it legally, but the only way they can stop free thought is by trying to manipulate public sentiment. We are no stranger to this phenomenon; you can probably think of a few scenarios where people appear to be tragically misinformed and brainwashed.
While I’m not of the cynical camp that everything is a psychological operation these days, the reality is that everything comes down to sales and marketing — especially for schools of thought.

Why would the government want to ban bitcoin?

Bitcoin works in parallel: Governments trying to hold onto central banking power are working on framing Bitcoin as an evil that works against the betterment of society.
To quote Senator Elizabeth Warren,
“cryptocurrencies undermine the government’s ability to maintain robust economic growth over time…Online theft, drug trafficking, ransom attacks and other illegal activity have all been made easier with crypto. Experts estimate that last year more than $412 million was paid to criminals in ransom through cryptocurrencies.”
And yet, she and other politicians alike fail to mention that between $800 billion and $2 trillion of fiat money is globally laundered each year, according to estimates from the United Nations —about 400 times more than in cryptocurrencies. In 2020, the criminal share of all cryptocurrency activity was just 0.34%.
What it seems to all come down to is control: The government currently regulates the economy by manipulating fiscal and monetary policy to foster economic growth. But to put our trust in the government is to put our trust in people who lack integrity, make decisions based on lobbying, and happily bail out big banks when they mess up without any care for what happens to the people (if you want an example, look up the Financial Crisis of 2008).
In China, Bitcoin has been “banned” countless times, one way or another. In general, China’s stance has been very anti-Bitcoin, since they want to create a digital yuan (a CBDC: central bank digital currency) that can be controlled and surveilled on. Bitcoin scares those with centralized control: What if the people choose something that we can no longer manipulate? It must be stopped.
If the government tries to ban Bitcoin or cryptocurrencies, what will most likely result is a large pushback from the cryptocurrency community that attracts worldwide media attention — causing people who previously had never been interested in Bitcoin to now start looking into it.

The Concern for Mass Adoption

“Okay, so what if the government can’t stop Bitcoin? They can at least stop people from adopting it, right?”
The government may think they can slow down Bitcoin adoption, but their endeavors may not work out so well for them.
Allow me to introduce you to the law of unintended consequences. Some of my favorite examples include the Cobra effect and the Streisand effect (these stories are worth a quick search) — both are examples of situations where the exact opposite of what was intended ended up happening.
If Bitcoin does get “banned,” it will only end up being the biggest free marketing campaign that Bitcoin has ever had.
Can you see it now? The walls that they put up to hold us back will fall down. It’s a revolution against the existing, corrupt financial system that has harmed too many for far too long, and change is coming whether or not our leaders want to embrace it.

Join the conversation and tweet your questions with #21DaysofBitcoin! Unless, that is, your Twitter account is banned…

Bitcoin is freedom.
From Britney Spears’ conservatorship to entire countries of people in poverty, bitcoin shines a new light of hope on those who are economically trapped or excluded from the existing financial system.
Many of you reading through this right now likely don’t see the necessity for something like bitcoin in our personal lives; some of you might be occasionally tight on cash, others are living in a first-world opulence.
You might think that in order to solve the world’s issues surrounding inequity and inequality, we should be redistributing our wealth in a way that levels the playing field — and thus far, that seems to be what we’re doing as a society.
But to foster a system where we create dependency on others such as state actors to help us out is to push for a continual power imbalance — where ultimately, symptoms are (poorly) fixed and issues aren’t tackled at their core.
Bitcoin presents a true solution. If you fix the money, you’ll fix the world.

How Does Bitcoin Solve Global Problems?

The reason you might not see the value in bitcoin is because people don’t recognize the benefits of privacy and decentralization as forms of resilience against corrupt state actors, until they themselves experience an event that demonstrates the value behind such resilience. But, perhaps by listening to some stories of those whose lives have or can be improved because of bitcoin, you’ll start to see it in a new light.
Bitcoin isn’t just another investment asset to some. For many people around the world, bitcoin is just the thing they need in order to live a free and fulfilling life.
Currently, 4.2 billion people are living under authoritarian rule, and 1.2 billion are experiencing double or triple digit inflation. Most of us reading this right now aren’t familiar with these experiences, but the truth is, this issue is more prevalent than you think.

Venezuela As A Case Study

At the Bitcoin Conference in 2021, there was a dumpster filled with Venezuelan bolivars, all virtually worthless. Though the story is much more complicated, long story short, the bolivar had its value essentially printed away. Imagine you’re paying $5 for a cup of coffee one day and a year later you’re seeing hundreds and thousands of dollar bills inside a dumpster because they have no use anymore.
This may seem like a dystopian, far-fetched reality, but from 2016 to 2019, inflation of the bolivar had reached nearly 54,000,000%, rendering origami crafts made from the bills more valuable than the bills themselves. To realistically buy a loaf of bread or a gallon of milk with cash, you would need to roll wheelbarrows full of stacked bills to your local store. Not only that, but under a hyper-inflationary economy, these prices would shift daily — or even hourly.

Adopting Sound Money

While many claim that “this will never happen to the US dollar,” to that I say, never say never. In relation to other fiat currencies, the U.S. dollar is very sound. But in comparison to bitcoin, it’s just a ticking time bomb with a longer countdown. While we may be the last to fall, it proves how fiat stability is rooted in power and corruption. Through war, sanctions, market dominance, and corruption, we’ve made everyone else in the world dependent on the stability of our dollar and central government.
But slowly, countries are realizing they need to default to a sounder form of money.
On September 7, 2021, El Salvador became the first country to officially adopt bitcoin as legal tender.
While many are skeptical to see how this will play out (as bitcoin is still in its very early stages of adoption and stability), many more are hopeful. If the government of El Salvador becomes corrupted, its citizens will be able to hold their wealth without their savings being debased. This is something that so many people in Turkey, Lebanon, Afghanistan, and other unstable countries can only pray for.
I only hope as many of these people as possible can discover bitcoin and realize that there is a solution. Rather than trying to carry jewels and gold across borders, one now only needs a simple seed phrase stored inside their memory to access and transport their wealth.
We’ve come a long way in our fights for justice, but it’s time to open the blinds and see how bitcoin can help us gain back our freedoms once and for all. You wouldn’t be the first renegade, but unlike those in the past, you now have full, self-sovereign control over your own wealth.

Sick of governments around the world forcibly dragging their financial baggage up your street? Tweet your questions and voice your concerns with #21DaysofBitcoin.

The number one complaint I hear about bitcoin is that it’s “bad for the environment.” This has caused a lot of FUD (fear, uncertainty, and doubt) about how positive bitcoin really is.
Now, while it’s easy to get caught up in the many biased Bitcoin articles arguing for or against this statement — typically with cherry picked statistics — here’s the reality: Most of us aren’t environmental experts, but I’ll bet that most of us care about the environment. Let’s look at this logically and put things into perspective.
Yes, Bitcoin requires a lot of energy to operate. Yes, some of our energy sources are unclean and bad for the environment. And yes, the Bitcoin network is a “waste” of energy — just like everything that requires energy is a “waste” of energy, depending on your perspective.

To many environmentalists, your modern appliances and big-city living habits are unspeakably hedonistic carbon footprint culprits. To others, energy usage for modern necessities isn’t so distressing. The same goes for Bitcoin: If you think it’s a useless fake internet money with no inherent value, then you’d question why we spend any energy on it at all.
As the numbers continue to change and all energy production leans towards clean, renewable sources, I’ll help paint a general picture for why we shouldn’t be too cynical. Bitcoin should not be scapegoated with “destroying the environment,” and here’s why.

Bitcoin Mining Incentivizes Clean Energy Production

To start, let’s consider this concept: Bitcoin works because every participant in the Bitcoin network is acting selfishly. The network is setup so that as long as we continue to act selfishly, we are also supporting the security and structure of the network as a whole (this was covered previously when we talked about how bitcoin is “unhackable”).
For miners, this means finding the cheapest long-term electricity in order to confirm transactions and receive new bitcoin rewards. It just so happens that clean, renewable energy is the cheapest, most sustainable source of power, while environmentally damaging fossil fuels are the most unsustainable. After all, the sun keeps shining and the winds keep blowing, but coal doesn’t burn unless we throw it in the furnace.
As such, bitcoin mining incentivizes a transition toward a 100% renewable, clean energy future.
Unfortunately, we currently don’t have the technology to store or transport clean power very well. This makes it so that tons of clean energy is curtailed and gone to waste, simply because we don’t have the ability to use it efficiently.
Here’s how bitcoin mining efficiently uses this wasted power.

Excess Regional Power

Take a look at the hydropower situation in Sichuan, China. When bitcoin mining was banned in China in early 2021, Sichuan was a lagging enforcer, allowing miners until September to withdraw from the province. This is due to the fact that in the summer, Sichuan has ample natural hydropower, but no means to utilize or store the excess energy produced. As much as three times the amount of normal power is produced during the summer, but power usage from ACs only increases by 30%. Thus, bitcoin mining uniquely allows Sichuan to not waste excess energy.
While unfortunate that mining has been banned in China now, similar circumstances play out worldwide where excess clean power is produced.

How Bitcoin Uses Energy

Contrary to popular belief, bitcoin transactions are not directly proportional to energy usage. In fact, it’s flawed to claim that bitcoin has a “per-transaction energy usage” at all. Transactions are batched into blocks at limited quantities due to the block size, and more transactions per block doesn’t mean more energy usage.
Lyn Alden proposes a great analogy: Imagine bitcoin block confirmations like running your dishwasher. No matter if your dishwasher is half full or completely full, it takes the same amount of water and energy to run every night. The same goes for bitcoin.
Your single transaction doesn’t marginally affect bitcoin’s energy usage, so you shouldn’t be guilted into not making a transaction just because a misinformed journalist told you your single bitcoin transaction could have powered 24 days of your household electricity.
Rather, a bulk of bitcoin’s energy usage comes from miners using proof of work to earn block rewards. Though it may seem like a “waste of energy” that so many miners spend so much energy just for only one miner to “win” a block, it ensures the security of the Bitcoin network, and I’d say that warrants bitcoin’s energy usage a place in this world — well, at least as much as your Christmas lights do.

On a mission to figure out what is up with all the bitcoin energy FUD? Tweet your concerns and questions with #21DaysofBitcoin

Today is the day you learn about self-custody. This is a challenging process that takes time to learn and is a daunting next-step to take. However, continue to ask questions (tweet them with #21DaysofBitcoin for help!) and do the necessary research, because self-custody is the entire purpose of owning bitcoin.

Why Self Custody?

Yesterday, we went over buying bitcoin from exchanges. However, the bitcoin you’re currently keeping on Coinbase isn’t technically “yours” yet. If someone hacks your Coinbase account (or Coinbase itself), there would be no way to recover your funds or trace who did the crime.
Even if you’re not worried about hackers, it is in the bitcoin ethos to strive for self-sovereignty; after all, if the government can access and seize your bitcoin because it’s on a centralized exchange, doesn’t that defeat the purpose of this decentralized asset?

What does it mean to “own” your bitcoin?

In order to truly own and protect your bitcoin, you will need to have your own set of “private keys” that only you have access to, unlike the publicly shared invoice address that you use to receive bitcoin with.

Private Keys Explained

Private keys are essentially very complex, randomly-generated passwords that allow us to access our bitcoin and to verify or “sign” our transactions. These keys are then represented in a 12 or 24-word “seed phrase,” which allows us to more easily record, memorize, and backup our private keys.

On an exchange like Coinbase, your bitcoin is stored in a “hot wallet,” where Coinbase owns your private keys. Because they own your keys, if they get hacked, so does everyone who keeps their bitcoin on there — yikes.
Only when you have control of your private keys will you have secure control over your bitcoin transactions.
Keep in mind though, that self-custody means you’re responsible for keeping these seed phrases offline and in a safe place where you won’t lose access to them. While there are methods of backing up your seeds onto physical, stainless steel cards, it’s not as easy as storing it in an online password manager.
Many of us have heard the woes of those who lost access to or forgot their seed phrases, thus losing access to millions of dollars worth of bitcoin. Let this be a lesson to us all: Keep your seeds safe, secure, and accessible.

Easy Self Custody Methods

In this lesson, I’ll introduce two easy forms of bitcoin storage methods so that you can begin your self-custody journey:
1. Software wallets
There are a few open source mobile options out there that are great starting points for beginners, such as Blue Wallet and Muun Wallet. Desktop versions like Electrum are also an option.

Although these wallets are connected to the internet, they generate a new private key that only you can control, which is a big step up from exchange-hosted wallets.
The great thing about having mobile/desktop wallets is that you can easily access your bitcoin anytime. The downside is that if you don’t take the right security measures, someone who has access to your phone or computer could also have access to your online bitcoin wallet.
While mobile wallets are good for on-the-go use, they’re not the most secure. If you are just starting out with minimal funds, software wallets are a great, free option.
Fortunately, there are also more advanced options to utilize your software wallets as “watch only” wallets, where they merely act as a user interface for your cold storage but do not hold your private keys. This would allow you to generate invoice addresses for receiving bitcoin, but would prevent a hacker from transferring anything out.

2. Hardware wallets

Hardware wallets are the most straightforward and popular form of offline cold storage. These wallets securely contain your private keys and typically come in the form of a flash drive-like device (popular ones include the Ledger Nano S or the Coldcard). The devices themselves are protected with a PIN so that your private key will still be somewhat safe even if your hardware wallet is stolen.

Because your hardware is not connected to the internet, it is considered “cold” and a much safer method of private key storage than online “hot” wallets. These physical devices allow you to access your bitcoin securely by storing your private keys offline.
It’s a common misconception to think that your hardware wallets “hold” your bitcoin — your bitcoin lives on the blockchain; the hardware wallet is merely a means of storing and using your private key to authorize transactions that move funds. Although a hacker could guess your pin to access your hardware wallet, it is extremely unlikely as most wallets will wipe themselves out after a few wrong guesses.
If this physical device is lost or stolen, you can still recover your funds with a new hardware or software wallet, as long as you have access to your seed phrase.

Additional Security Measures

With great power comes great responsibility, and the ability to self-custody your bitcoin is a great power indeed. Aside from removing your bitcoin off of exchanges, making sure your seed phrases are kept private and secure is of utmost importance — this is your only backup.
Many people like to take on additional security measures by storing backups of their seed phrases in vaults, or setting up more advanced multi-signature wallets that require additional private keys to authorize transactions.
On another note, be aware of phishing scams like fake hardware wallets being sold by scammers on Amazon or Ebay; always purchase directly from the manufacturer to ensure that your hardware wallet is the real deal.
It’s time to take your first step in bitcoin self-custody.
And, remember, not your 🔑, not your 🧀.
#21DaysofBitcoin

Friends,
You have spent the last two weeks learning about how bitcoin works and why it works. For this final week, we’ll be discussing what bitcoin can do for you, but more importantly, what bitcoin can do for the world.
Perhaps you’re a seasoned bitcoin expert and you’ve got bitcoin wallets hidden all over the world, like some people that went all in on bitcoin when it was just $900.
Or, perhaps you’ve only just discovered what bitcoin is.
In any case, bitcoin is something that is for everyone, accessible to all — no matter your social or financial standing.
Many big banks and brokers are telling people that only their wealthiest, “accredited,” elite customers have access to this relatively new asset class. This is a ridiculous ploy by the legacy financial system that continues to unfairly deny equal participation in financial services that should be accessible to all. Fortunately, bitcoin requires no permission to participate.

What Are We Investing In Exactly?

At the moment, bitcoin is still viewed by some as a risky and volatile asset class that one invests in, hoping to make significant returns on. While there exists a culture within bitcoin that tells you to “buy and hold,” there are many people out there actively trading, holding short-term, or using bitcoin as a diversification asset tool as well.
While you should continue to do your own research and make the financial decisions that best suit you, if you’re ready to buy, sell, or transact bitcoin, I’ll break down how to do all of that step by step.

How To Buy Bitcoin

The easiest way to buy bitcoin is off of an exchange. You can use any exchange you’d like (such as Strike, and CashApp is great for beginners), but there are plenty of options to choose from. Keep in mind, however, when choosing an exchange, to make sure you choose one that allows you to transfer your bitcoin off of the exchange. This means you should not buy any bitcoin off of Robinhood or similar exchanges, since you would have to sell your bitcoin to take your money off of the exchange.
When you buy from an exchange, you are required to go through a process called KYC (Know Your Customer). This process requires your social security number, photos of your ID, and photos of your face to prove that you are you. Many bitcoiners are concerned with greater privacy and security than these exchanges can accommodate, so they choose to purchase “non-KYC” bitcoin from peers off of websites like Bisq — at a premium.
After you purchase bitcoin, you should send your bitcoin to a self-custody solution, which we’ll go over tomorrow. This is to protect your bitcoin just in case an exchange is hacked — while it’s more and more unlikely to happen now, this tragedy has unfolded multiple times before.

Reasons To Invest In Bitcoin

Okay, aside from being philosophically and economically sound, why should someone buy bitcoin? Buying bitcoin means storing wealth for yourself or your family — it’s not for anyone else’s benefit.
As inflation burns through working-class American stories and hyperinflation paints entire countries blue, it’s important to protect your future before it gets printed away. Creating generational wealth may have been easier for our parents and grandparents, but those who are growing up today see astronomically high tuition, real estate, and costs of living that aren’t adjacent to wage growth. By buying bitcoin, you’re shielding yourself and your family from the battle against currency debasement.

I’m still skeptical…

A big reason why many people continue to shy away from their first bitcoin investment is because bitcoiners are so deeply passionate about onboarding them (since they want to see you protect yourself), in the same way that your old high school classmate suddenly wants to be your best friend as they try to get you to sign up for their MLM.
While bitcoiners are purely intentioned, it often comes off as them shilling a Ponzi scheme. And although that’s the case with many altcoin cryptocurrencies (otherwise known as scams), nobody individually stands to benefit from an additional bitcoin user. Rather, the network expands and strengthens, and users are rewarded for their long-term investment holdings. So, negating any of this as financial advice, if you want to buy bitcoin, you should assess your own portfolio risk management and consider an allocation.
And although previous price performance doesn’t predict the future of how an asset or stock will perform, it might satisfy you to look over bitcoin’s performance in the last decade.

The soundest recommendation for those who buy bitcoin (and most other investment assets) is simply to just hold it long-term. Timing the market and trying to trade doesn’t usually fare well, and you’re better off just setting and forgetting it. Remember this: play stupid games, win stupid prizes.

Investment Takeaways

Disclaimer: none of this is financial advice. I personally own bitcoin and I believe in its long-term success. However, with any investment, it’s important to do your own due diligence and understand exactly what you’re buying. With that said, many financial advisors today would tell you it’s considerably a good idea to allocate at least a small non-zero percentage of your investments into bitcoin. This way, you’re leveraging a low risk with a potential of high future returns.

Want advice from real people who have been transacting bitcoin for years? Tweet your questions with #21DaysofBitcoin!

In its core doctrine, bitcoin is about privacy, freedom, and self-sovereignty. Politically, many bitcoiners tend to be libertarian, with ideologies ranging across the conservative-liberal scale. No matter how they disagree on certain socio-economic stances, there is one unwavering, common belief: the government has no business dealing in your money.

A separation of state and money — this is what the bitcoin ethos is built on.

Let’s talk about politics

Ah, one of the two dreadful topics you never dare to bring up at the dinner table. It seems like everything is made political these days, from voting eligibility to how we deal with the COVID-19 pandemic. One thing is clear, from a bipartisan stance: these are topics that should not host a partisan divide, yet they manifest now more drastically than ever.
Bitcoin is dangerously close to becoming politicized — and many would argue that it already is.
With Elizabeth Warren, a highly influential Democratic senator in the United States publicly denouncing bitcoin, and Ted Cruz, a highly influential Republican senator publicly endorsing bitcoin, it seems like we’ve once again manifested a crooked path in a straight line down.
Contention is expected in the debate of bettering the world. But to paint things in black and white is certainly not how we progress forward, and it’s a misrepresentation of what bitcoin symbolizes for all of us.

Bitcoin Works for You, No Matter What You Believe In

Do you strongly believe in your freedoms and accesses (to guns, abortion, or whatever else) as laid out by your constitutional rights? Are you passionate about protecting the planet at all costs? Do you think you’re paying too many taxes for no good reason? Are you wearing a hoodie that says “Eat the Rich” on it?
If you answered yes, no, or I don’t care to any of the questions above, then bitcoin is for you!
In our modern political climate, those who are part of democratic nation-states hold a privilege of liberty and autonomy as allowed by the law — as long as we are not infringing on the individual rights of others. However, even in nations like the United States (known as the “land of the free”), many of us feel an injustice in the legal dictation of what is increasingly allowed or disallowed.
This all ties back to money: Policy is fueled by lobbying funding, elections by marketing budgets. Well, at least in countries like the United States.
Other nation-states are not so lucky. They deal with dictatorial control, exacerbated power imbalances, and extreme poverty and war as a result of corrupted and poorly structured leadership. Many of us could argue that, on a smaller scale, this is even happening in our own backyards.

Bitcoin Gives Us Back Our Independence

One of the most prominent arguments politicians make against bitcoin is that bitcoin fuels crime and corruption due to its pseudonymous transactional nature. But take a look at this from a different stance — global governing policies are not always ethically (or common sensibly) created.
There are states and countries out there where basic rights like access to education or personal banking services are denied to certain groups. It may be a crime to curb these policies with bitcoin, but most of us would probably argue that the real crimes are the existing laws themselves. To fight for justice, we need private and self-sovereign methods of storing our wealth. Really, it’s no different than hoarding cash. The difference though, is that with cash, we have potential issues with transporting wealth, counterfeiting, confiscation, accidental loss or theft, and robbery. Bitcoin solves all of this.

Seeing Bitcoin as a Solution

Whatever issues you’re concerned about, try and see how bitcoin can be a solution rather than another layer to our pile of problems. Over the next few days, I’ll dive into how bitcoin can help solve global wealth inequity, incentivize clean energy production, and protect the vulnerable from corrupt government regimes worldwide.
If bitcoin is pushed away by certain political parties, I’ll only hope we can go back and remember what we were fighting for — freedom, liberty, and justice. Bitcoin brings us closer to that commonwealth goal, no matter your party preference.
So the next time you’re at the dinner table surrounded by family members scattered across the political spectrum, I encourage you to talk about bitcoin. Bitcoin is apolitical, and everyone should be a part of the conversation.

Ready to talk politics? On Twitter? Yeah…that might not be a great…idea… BUT — you can talk about bitcoin with people across the political spectrum and find common ground with #21DaysofBitcoin!

Bitcoin is a novel invention that is hard for most people to wrap their heads around.
We can easily understand why gold and other precious metals have value. We understand that fiat money has value as assigned by our government. We understand that investing in a company is investing in its people and in their innovations.
But investing in bitcoin is just investing in…nothing that we can see, feel, or immediately understand. And this begs the question that comes to everyone’s mind when they first hear about bitcoin: What is its “intrinsic value?”

Bitcoin vs Gold

You might have heard the phrase, “bitcoin is digital gold.” Now, in the sense that it’s a store of value (and a better one than gold at that), this is true. However, at face value, gold is a tangible thing that can be seen, held, and used in jewelry and electronics. Bitcoin achieves…none of this. Yet, it is still a better store of value. Because while gold has the benefits of being seen and used as a physically tangible asset, these are the same things that make it a poorer store of value than bitcoin.
Let’s compare gold to bitcoin:

Shaving off pieces of your gold bar to pay for pumpkin spice lattes was never a viable option. Enter: fiat backed by gold, then eventually fiat backed by nothing but the government’s word.

What is the “intrinsic value” of the U.S. Dollar

That’s right, the dollar bills printed and distributed by the government aren’t backed by anything. Fiat money is just…paper with security tags on it? The only reason it has value is because the government says so, and this isn’t a good thing. Eventually, the cards will fall, and the housed trust that the government once held might someday render the dollar worthless.
This isn’t an unreasonable scare tactic, either. We’ve seen this play out in countries like Venezuela, where government corruption has rendered their national currency, the bolivar, effectively useless after suffering an inflation rate of nearly 54 million percent just a few years ago.
With bitcoin, nobody alone gets to dictate that there is value to it. Rather, the entirety of the Bitcoin network agrees to assign a certain monetary value to bitcoin, depending on its demand (which continues to rise over time). Not to mention, it does this without the threat of violence and power that all fiat currencies are upheld by. The value of the Bitcoin network and all the transactions that take place within it are secured by the blockchain, automatically managed without a middleman.

Do we need “intrinsic value”?

Unlike gold, bitcoin cannot be smelted to make jewelry or leafed to cover your gourmet soft serve. But bitcoin’s purpose isn’t to serve you in any physical way. It’s merely a medium of exchange, a store of wealth, and a peer-peer electronic cash that you can store access to in your memory.
And honestly, that’s a benefit over gold. Its value isn’t dependent on physical use cases — just purely predictable scarcity.
In a few emails, I’ll go over self-custody and what exactly that entails. But long story short, if you want to ensure security and ease of access, you can carry your bitcoin in a device no larger than a USB stick and keep a backup of it in your mind (pure magic). Or, you can buy heavy gold bars that are expensive to store and pray that we don’t start mining gold from asteroids and flooding the supply; if that were to actually happen, you wouldn’t be able to sell your gold fast enough.

The intrinsic value of bitcoin is a hot button topic. Join the conversation on twitter with #21DaysofBitcoin!

Previously, we talked about the bitcoin vs. bitcoin cash debate, where proponents of bitcoin cash argued that bitcoin isn’t scalable enough. Many people like to criticize Bitcoin’s limited network bandwidth by referencing payment processors like Visa and MasterCard, which process over 5000 transactions per second; in comparison, the Bitcoin network processes about five transactions per second.
There’s a valid concern here — how can bitcoin replace this existing payment network if it can’t even scale?
But the mistake people make is assuming that credit card processors act as payment settlement base layers. This is certainly not the case, and actual transaction settlements often take several days to resolve—instant credit card transactions are merely sitting on top.
So, why are people treating Bitcoin like a secondary payment layer when it’s really a base settlement layer?

Proposed Solutions

Numerous proposed solutions have been brought up over the years as the network continues to grow larger and larger. One such proposal is a conjunction system between the existing financial system and the Bitcoin network.
For a few brief decades from the late 1800s to the early 1900s, under the gold standard, banks held reserves in gold and handed out paper “certificates” or “bills” that represented an IOU to their gold reserves. To put it simply, people needed a way to pay in small denominations in a way that was easy to carry and store — they certainly weren’t going to run around cutting off little pieces of gold bars to exchange for groceries.
Under a similar hypothetical “bitcoin standard” we could hold bitcoin under custody and execute layered transactions as custodians batch them onto the blockchain. For instance, you can send bitcoin back and forth on CashApp for free, but you are not really “sending” bitcoin. Rather, you are receiving an IOU anytime someone pays you, and only when you transfer your bitcoin to your own wallet is when the transaction is confirmed on the blockchain.
There are other options like scaling via sidechains such as Blockstream’s Liquid, but the most popular in-use remedy at the moment is this layer 2 solution: the Lightning Network.

The Lightning Network

The Lightning Network was created in 2015, designed as a second layer protocol that would help scale bitcoin transactions in order to lower user fees and allow for instantaneous transactions.
When you transact with someone via Lightning, you only perform bitcoin base-layer transactions when opening and closing the channel. While the channel is open, you can send thousands of micro-transactions instantly with negligibly low fees (often less than a penny).
Additionally, you can send funds to those you aren’t directly connected to.
Imagine that you are back in primary school playing a game of telephone with your friends. In order for the person at the end of the line to receive the message, you need to whisper the message to the person next to you, who then passes it on to the person next to them, and on and on.
Since you’re not connected to the person on the end, you can’t just whisper the message to them — you need to pass it to someone else first. Lightning channels work similarly in that they can “pass on” transactions through shared channels, in a trust-less way. When you want to send a Lightning payment to a merchant, for instance, you don’t need to open a direct channel with them. Rather, the network finds the fastest route to channel your payment through, making the transaction process seamless and easy.

The Future of Scaling Payments

When bitcoin is realistically scaled, people won’t really need to know exactly how these payments are routed — just like how you probably don’t exactly know how your credit cards and wire transfer payments are settled. But, if Lightning is something that sparks a technical interest, you can read more on how it works here.
While Lightning is still a fairly new system, it’s developing at a fast pace. Already, it is being used practically en-masse for people to send tips or pay for consumer goods (like in El Salvador) instantaneously in bitcoin.
With solutions like Lightning, other altcoins such as litecoin or bitcoin cash that claim to solve the scaling problem are rendered inconsequential.
Bitcoin is a full on rainstorm, while fiat is a house of cards ready to collapse at any moment. As the world keeps their eye on Lightning and how it helps scale bitcoin in an entire small country, I only hope this will captivate the attention of other nation states to follow suit in adopting this sound, decentralized currency.

In this video, we explore how the lightning network makes Bitcoin scalable to a global audience.

The lightning network is a second layer that operates on top of the Bitcoin blockchain and anchors directly to it, allowing for millions of transactions per second and helping to solve Bitcoin’s scalability problem.

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A fork in the road.

2017: Civil War

We’re starting today off with a small history lesson. While it seems like eons ago already, a fairly recent civil war emerged between two sides of the bitcoin community in 2017 — changing everything.
By now, you’re familiar with bitcoin, or what we know as BTC (alternatively, XBT on some exchanges). In 2017, Bitcoin Cash (BCH) emerged as the result of a “hard fork” that transpired. Hard forks are pretty intuitively explained by the graphic above, but in essence, when some people want to change the rules of a blockchain network (without full consensus approval), they break off into a separate blockchain completely to change their network’s rules. Kind of like a divorce, if you will.
This is exactly what happened with BTC and BCH. On August 1, 2017, everyone who held bitcoin now held an equal amount of bitcoin cash. The community soon decided that BTC would be the winner (as proven by the price difference and hash-rate today). But why the contention in the first place?

The Scaling Problem

If you ask many bitcoiners today what they think about bitcoin’s scaling issues, they will chuckle and tell you that bitcoin doesn’t have a scaling problem. However arguably problematic the scaling issue is, the underlying truth is still the same: bitcoin cannot scale on its own. It needs solutions if the world is to adopt it.
Tomorrow I’ll go over layered solutions for scaling bitcoin for use as a peer-to-peer cash, but today we’ll be covering how bitcoin cash attempts to natively scale bitcoin — on the blockchain.

The Blocksize Debate

Early adopters of bitcoin debated over how to scale bitcoin. While some argued that scaling should be solved with patiently developed off-chain solutions, others pushed for increasing bitcoin’s 1MB block-size, so as to not drive away new adopters when blocks became increasingly congested with transactions.

At first glance, it seems like a good idea to increase block size capacity and lower transaction fees for users. But going down this route would require more expensive and sophisticated hardware, making it less accessible for individual users (as opposed to massive corporations) to be able to verify blocks with their own nodes. As block size increases, it becomes more difficult for full nodes to efficiently validate blocks, thus increasing the barrier to entry for running nodes and making bitcoin less decentralized.
Bitcoin must scale, but it needs to do so without compromising security and decentralization.
Because of this contention in the bitcoin community, those who pushed for a larger block-size launched bitcoin cash by creating a bitcoin hard fork that would increase the block-size from 1MB to 32MB capacity.
Unfortunately for the bitcoin cash community, the last few years have phased it out of relevance. While there are still many proponents of bitcoin cash today, the general community has dictated bitcoin the winner, as proven by its market dominance and the mining power dedicated to the Bitcoin network.

Other Types of Forks

Many more hard forks have come out of different cryptocurrencies over the years. One of the most popular forks of bitcoin is Litecoin (LTC), and a prominent fork of bitcoin cash is Bitcoin SV (BSV).
Typically, hard forks result from those who are unsatisfied with an existing protocol’s rules, such as block size or the amount of time required to mine a new block. Although hard forks continue to emerge, it is highly unlikely that any of these cryptocurrencies become anything but a “pump and dump” scheme. If they do survive as a top cryptocurrency, such as litecoin has, their goals to replace bitcoin as an “improvement” are quite impossible; this is due to bitcoin’s existing network dominance, which I’ll cover next week.

As you continue researching bitcoin and cryptocurrencies in general, tweet your questions with the hashtag #21DaysofBitcoin.