Here are some great resources from around the web to continue your journey with
- The bullish case for Bitcoin, by Vijay Boyapati
- The quest for digital cash, by Alex Gladstein
- Finding financial freedom in Afghanistan, by Alex Gladstein
- Bitcoin is Venice, by Allen Farrington
- Andreas Antonopoulos’s YouTube Videos – great talks on theory and principles
- BTC Sessions – great practical tutorials
- Bitcoin Macro Strategy Talk, by Michael Saylor & Ross Stevens
- Live announcement of BItcoin as legal tender for El Salvador
- The Fake Environmentalist Attack on Bitcoin, by Reason TV
- The Bitcoin Standard, by Saifedean Ammous
- The Sovereign Individual, by James Dale Davidson & William Rees-Mogg
- The Price of Tomorrow, by Jeff Booth
- 21 Lessons, by Gigi
- The Little Bitcoin Book, by the Bitcoin Collective
- Bitcoin Billionaires, by Ben Mezrich
- What Bitcoin Did, by Peter McCormack
- What is Money, by Robert Breedlove
- The Pomp Podcast, by Anthony Pompliano
- Speaking of Bitcoin, Andreas Antonopoulos et al.
- Bitcoin blockchain explorer
- Bitcoin Supply Visualized
- What companies own Bitcoin?
- Look into Bitcoin
- Clark Moody’s Dashboard
- Umbrel – Bitcoin & Lightning Node
- MyNode – Bitcoin & Lightning Node
- Bitcoin philosophy by Gigi
- Andreas Antonopoulos’s YouTube Videos
- 6102 Bitcoin – Privacy & Security Links
- Bitcoin Privacy Guide
The whitepaper is the foundational document that Satoshi Nakamoto published introducing and outlining the vision and mechanism of Bitcoin
Some short soundbites to start you down the rabbit-hole of bitcoin. These topics are given more in-depth analysis on our blog under the same titles.
What is Bitcoin?
“Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple, & secure savings account to billions of people that don’t have the option or desire to run their own hedge fund.” – Michael Saylor
Bitcoin was designed, engineered and realised by the pseudonymous Satoshi Nakamoto in response to the unjust bailing out of the banks in 2008’s global financial crisis.
He designed it so that 21 million Bitcoins would be produced through a very intelligent and elegant process. Each coin further subdivides into 100 million Satoshi’s. Over 18 million coins have so far been issued with supply completing in 2140.
Why do we need Bitcoin?
In a world where our personal property rights are being eroded away by governments and we find ourselves working exponentially harder for a currency that’s getting exponentially weaker, Bitcoin was incentivised into existence.
Bitcoin is a meticulously engineered monetary system standing in sharp contrast to the corrupt, inflationary, and unreliable monetary system of today. It eliminates the need for trust in third parties such as governments, banks and brokers, giving the individual complete sovereignty over their personal property.
Since the value of goods eventually trends to their marginal cost of production and fiat currencies are produced at the push of a button and therefore almost nil cost, it’s perfectly reasonable to assume that the dollar, pound and euro will eventually trend to zero, much like every paper/fiat currency before it. This is the point at which the world needs the hardest money yet conceived.
What is a blockchain?
The Bitcoin blockchain is a digital ledger distributed across a global network of independent computers (nodes).
Each block of transactions is validated by Bitcoin miners and the books (or blocks) are time stamped and closed cryptographically every 10 minutes, before being copied across all computers in the chain. This process maintains the transparency of the network and its complete decentralisation and encryption make it both uncensorable and the securest network in history.
Bitcoin vs bitcoin
Bitcoin is best understood as being both an asset, and a network. Bitcoin the asset is the open and inclusive base layer protocol of 21 million coins mined through computational power by miners, validated by nodes, and stored on wallets by owners.
Bitcoin the network is comprised of the layer 2 applications such as the Lightning Network. Lightning allows money to be converted from the user’s currency to the recipient’s currency, anywhere in the world instantly, with almost zero fees, and achieving immediate cash finality on their mobile device. Never before have we had a monetary technology achieve store-of-value, medium of exchange and unit of account with such efficiency, accuracy and security.
Bitcoin the asset is the ultimate store of energy and cannot be devalued, censored, or stolen. As such, it has no competition as a repository for our time, labour, and mechanism for handing on generational wealth.
How does Bitcoin succeed?
Bitcoin, already the natively digital currency of the internet, the reserve currency of one sovereign nation and now the favoured institutional grade investment asset, is owned by publicly traded companies, hedge funds, banks, politicians, and ordinary people. It is truly inclusive.
Bitcoin cannot be manipulated and is bound by the laws of maths and physics. It has an in-built deflationary mechanism with a fixed and scarce supply, standing in sharp contrast to the fiat monetary system of today.
Bitcoin is the most secure of property rights and since it can’t be stolen or confiscated, disincentivises violence and war.
Bitcoin fixes the flaws of every monetary technology before it and advances them by orders of magnitude.
Just as the world converged on one internet protocol – TCP/IP – it seems likely that it will do the same with monetary technology – Bitcoin.
Bitcoin vs Crypto
Bitcoin is considered the first crypto-currency and is now the biggest by market-cap.
Bitcoin is the only truly decentralised and distributed crypto-currency. This is due to its proof-of-work mechanism versus the proof-of-stake mechanism favoured by many of the more centralised chains and tokens in the crypto space.
Within the landscape of ‘cryptos’, Bitcoin has won the war of monetary premium. .
Bitcoin’s design prioritises the absoluteness of the base layer protocol, opting for security over speed but allowing for layered applications to achieve utility on top. Cryptos attempt to achieve maximum utility at the base layer, compromising security and decentralisation. Thus, greater speed and efficiency tends towards more centralisation and therefore single points of weakness.
These are only some of the reasons Bitcoin stands apart from ‘cryptos’.
The next level
Now you’ve been “orange pilled” take some time to learn some of the details.
What is Proof of Work
“Without proof-of-work, all systems revert or devolve into human policy, inviting moral hazard, lobbying, influence, or finally into grantable inelegant work, like brute forcing transaction variants to find future where you get a reward” – Adam Back
Proof-of-work is so simple, and yet the conversion through computation of energy into digital energy bridges the analogue and digital worlds. Only history will fully appreciate the true innovation of proof-of-work. The E=mc^2 of value provides an engineered commodity money that maintains the laws of thermodynamics and provides a digital premium far surpassing that of physical gold.
What about the environment?
It’s long been suggested that Bitcoin has a high energy usage and is therefore bad for the environment. When the stats on how much energy our current global banking system uses not to mention the massive military machines sponsored by the petrodollar complex, Bitcoin’s energy consumption is a worthy use of resource and indeed pales in comparison.
Bitcoin mining is now driving innovation around renewables and doing so quicker than any other industry. Miners are incentivised to find cheap and clean energy. El Salvador, for instance, is now mining using stranded volcanic geothermal energy. New publicly traded mining companies are acting as back-stops to power producers who have no means to monetise normally flared gas, or hydro-electric over-production.
Bitcoin doesn’t care where it’s mined, so in short, these gains for the energy sector are sizeable gains for the world and will be explored further in our blog. The US based Bitcoin Mining Council is now publishing data on energy splits and we will continually bring you updates on this.
Finally, Bitcoin’s proof-of-work energy use is the bridge between the socio-political, thermodynamic analogue world and the digital world. There is no other mechanism we know of that can achieve this nature of decentralisation without it.
See this video for more context.
Checks and Balances
With proof-of-work Satoshi solved the Byzantine Generals’ problem. How different parts of a distributed system achieve consensus or agreement without a mediator or arbitrator is done through the proof-of-work innovation. Complex systems don’t work when one part of the system appears to be working, and yet is simultaneously failing or breaking. This can result in catastrophic system failure.
The truly distributed Bitcoin blockchain achieves this through Miners and Nodes.
Miners, in solving the increasingly difficult mathematical equations, uncover the cryptographic hash value of a block. This is then broadcast to the network as ‘proof’ and if the nodes agree with consensus, it is validated. This block is then permanently linked to the block before it, creating the blockchain.
If a miner attempts to step outside the ruleset, reverse engineer, create a fork, or generate more coins outside of the coded cap of 21 million, the nodes will not validate it. The miner would’ve wasted a (currently) six-figure sum of money on energy and receive no block subsidy for their work.
These are some of the built in checks and balances of the system all contributing to Bitcoin’s immutability.
A new Investment Paradigm
In 2020, when asked “what would be the winner in 10 years’ time out of commodities, stocks, bonds, or gold, legendary hedge fund investor Paul Tudor-Jones said “my bet is it will be bitcoin.”
With government controlled currencies on the ropes, smart money is looking beyond traditional markets for returns to keep ahead of the inflationary headwinds.
Bitcoin is only 12 years old and since it’s a nascent asset class, experiences a greater degree of volatility than legacy investment instruments. However, unlike legacy investments, it has grown 130% year-on-year since its inception, meaning that when viewed with a longer time horizon, short term peaks and troughs find themselves easily ironed out to the upside.
As the liquidity steadily increases in the system, the volatility will gradually decrease. We do not recommend attempts at timing the market since most people have neither the knowledge or time to analyse markets and trade successfully. Simply, our approach is to make a principal investment, contribute regularly, and ‘hodl’ (or hold) in cold storage. No one has ever lost money holding Bitcoin for a minimum of 4 years, and in fact, have enjoyed returns unavailable elsewhere.
Is Bitcoin Safe?
This is a natural question to ask when allocating hard earned money or assets.
Bitcoin is arguably safer than anything else that can be owned. It is the first property right that cannot be stolen, confiscated or destroyed. If you self-custody your Bitcoin, or set up access with multi-signature keys, incentives to violence or force against you are less likely because the violent actor must negotiate to realise any of your assets, hence at best they get half. With fiat currency or other property, theft or confiscation are all too common.
Offering people sovereignty over their money and eliminating trust in third parties at the transaction or securing layer is one of Bitcoin’s significant advantages, especially in a world with so much fraud and over-leveraged banks. Men and women recently queuing outside of their banks in Afghanistan, Lebanon, Zimbabwe, or Venezuela to try to unsuccessfully access their own resources is precisely one of the perils of fiat currencies’ that Bitcoin mitigates against.
Ultimately, trusting third party intermediaries is something most Bitcoiners seek to avoid. Satoshi’s motivation was to create a “purely peer-to-peer form of electronic cash.”
Bitcoin bought reliably, self-custodied, and backed up with secure private keys or in multi-signature wallets will keep your property your property until you deem it right to spend it or hand it on.
As to the network itself, it has never in its history been hacked. It is anti-fragile and adversity, chaos, or media proclamations on its death only serve to give it strength.
The Bitcoin Standard
Bitcoin is open to all, is easy to use, but cannot be altered. It possesses its own ruleset which permits no deviation. This predictability is a welcome change to the manipulated, easy and immoral money of fiat systems.
Adoption of Bitcoin is significantly outpacing the adoption of the internet in similar timeframes of their existence. Bitcoin being open-source, has some of the best developers in the world working on it. Incredibly smart application layers, like the Lightning network, are being built on top of the secure and robust base layer, allowing Bitcoin to scale and outcompete every legacy payment rail in existence, whilst ending the ‘double-spend’ problem and doing so with almost zero fees.
As indicated earlier, out of the cryptocurrencies, Bitcoin has won the monetary war, with others now competing over utility. ‘Cryptos’ are modelled on Silicon Valley approaches to tech of design and build quickly and try to break it. Greg Carson’s take on Bitcoin suggests the opposite approach of “move glacially slow, and design for inevitability.”
In looking at the macro picture, it’s harder to not believe in the inevitability of a Bitcoin Standard than it is to believe in one. With fiat currencies on life support and governments at sixes and sevens to release Central bank Digital Currencies (more often associated with control and surveillance) Bitcoin is quickly eating every asset in front of it. There’s little doubt CBDC’s will drive more into Bitcoin as freedom money and it will continue to be the apex store-of-value, not-to-mention it’s rampage to becoming the ultimate medium of exchange and unit of account.
Thiers Law states that good money will always drive out bad money, and as the $400 trillion of global assets moves into Bitcoin, all can enjoy the abundance that Satoshi envisioned for the world. This is the Bitcoin Standard.