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Friday, April 16, 2021

What is Bitcoin? Why is it special?

An intro for crypto newbies...

Originally posted at outsmartbigbrother.com.

Bitcoin is the OG cryptocurrency.

But what is a cryptocurrency and why should I care?

Find out in this episode.

What is a cryptocurrency?

A cryptocurrency is a type of digital money, especially one that uses cryptography and decentralization to make sure that you can only spend each unit once and that you can only create new units after performing some service to the community.

You might ask, “But if I use digital US dollars already, what benefits do I gain by using crypto?”

There are many problems with the US dollar, which crypto can solve. Since this episode is an introduction, I will focus on Bitcoin—the “original gangsta”—and the solutions and limitations which it offers.

First, let’s analyze fiat currencies, like the US dollar, the euro, and the Chinese yuan.

Fiat

  1. Centrally controlled.
  2. Potentially unlimited quantity (think: inflation).
  3. Total quantity is tied to arbitrary decisions by the central authority.
  4. Can potentially be anonymous if dealt in cash. Not private if dealt digitally.
  5. Requires trust in people and institutions with whom you do business, along with intermediaries.
  6. (If deposited in a bank) Can be easily confiscated by authorities.
  7. Can be difficult to make cross-border payments.
  8. Transactions tend to be reversible.
  9. Transactions can be censored by governments, banks, and other institutions.

Bitcoin

  1. Decentralized. No single entity has power over the Bitcoin network. This is due to the fact that Bitcoin uses blockchain technology as its foundation.
  2. Total quantity limited at 21 million.
  3. Quantity of new bitcoins created is determined by an exponential decay function.
  4. Pseudonymous. Instead of using your real name, you use your public key. But beware: as soon as someone is able to link your public key to your real identity, your entire transaction history for that wallet is revealed.
  5. If you can understand the code, it is trustless. However, those who cannot read code must trust the code itself. However, they still do not need to trust any third party.
  6. If private keys are well-hidden, Bitcoin can be extremely difficult to be confiscated by authorities.
  7. Easy to send Bitcoin to anyone’s wallet, regardless of where they are in the world.
  8. Transactions are irreversible.
  9. Transactions can be completed despite what governments, banks, and other institutions think.

At the end of the day, no, Bitcoin the protocol can’t be regulated. Obviously, men with guns wearing costumes are scary, but a gun can’t change the mathematics behind Bitcoin.”

Roger Ver aka “Bitcoin Jesus”

Keep in mind, Bitcoin is the first cryptocurrency as we know it. Obviously, there are a TON of improvements that have been made to the concept. That’s why you see many different types of cryptocurrencies, from Bitcoin, to Bitcoin Cash, to Ethereum, to Litecoin, to Dogecoin, to Marscoin. Each of these cryptos has its own set of pros and cons, which I hope to address in future episodes.

My challenge to you all this week is to do a self-assessment of your own financial situation.

“If the dollar were to go into hyperinflation, would my family be prepared?”

“Is crypto a viable alternative to cash and card payments?”

“What if the government were to seize my entire bank account tomorrow through civil asset forfeiture? Would my entire net worth be down the tubes?”

Then decide what you should do NOW to prepare yourself for when trouble comes.

Special thanks to Jenni Thee Libertarian for giving myself, Outsmart Big Brother, and the Mars Initiative a shout-out on Twitter.

By the way, did you know that the Mars Initiative (a nonprofit dedicated to funding humanity’s first trip to Mars) accepts (and HODLs) crypto donations? I volunteer for them and think that is really cool.

What topics would you like me to cover in future videos? Let me know in the comments.

Please like, follow, and share if you enjoy this content.

Stay free, everyone!

⚛️


Description:

Links for all outside content:

BTC image by xresch from Pixabay.

Music by Twisterium from Pixabay. Sped up by Jonathan McCormick.

Mars Initiative website.

For further study:

On civil asset forfeiture:

https://www.charleskochinstitute.org/issue-areas/criminal-justice-policing-reform/civil-asset-forfeiture/

https://www.aclu.org/issues/criminal-law-reform/reforming-police/asset-forfeiture-abuse

https://www.law.cornell.edu/wex/civil_forfeiture

Legal inquiries:

See OBB’s Terms of Service page: https://outsmartbigbrother.com/terms-of-service/

Jonathan McCormick, Jr.
Techie. Entrepreneur. Free thinker. Senior International Correspondent for Liberland Press. Blockchain Web Developer. Founding host of Outsmart Big Brother™. https://outsmartbigbrother.com/

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