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How To Explain Bitcoin To Newbies Without Losing Them
The advent of cryptocurrency is one of the most interesting and disruptive techno-social phenomena in recent memory, with Bitcoin (BTC) being the genesis of it all.
The Bitcoin⚡️ Energy Standard
January 08, 2023
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FAQ
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Those shoes fit all of us. The time has come where a friend, acquaintance, or family member of yours approaches you at a social function and asks, "You were into Bitcoin, right?" You're well aware that you have only a short amount of time to capture their interest and provide a summary. How, therefore, can you provide them with a coherent explanation of such an intricate and complicated issue?
To help you out the next time you're in that predicament, I've compiled a list of potential solutions.
CENTRALISATION IS THE ENEMY OF PROPERTY
You can lose control of centralised money in two ways. directly, as in Greece in 2015 and 2016, when people lost 20% of whatever was in their bank accounts to a government haircut; or indirectly, as the United States and the United Kingdom have shown by blocking access to Russian corporations' or individuals' assets during the current crisis in relations surrounding the Ukraine. Second, since all of our fiat currencies are managed by a small group of powerful people, this may be accomplished through inflation: the government creates more money, causing the value of your savings to decrease.
As a decentralised digital currency, Bitcoin is not issued or regulated by any central authority. It's a 21st-century safeguard against inflation and central bank money production, and it's a completely novel form of currency. When compared to the US dollar, it is a provably scarce digital asset backed by a barrier of encrypted real-world energy. After 10 years, the value of these coins has increased to 20,000 times that of the US dollar.
It is deflationary since it is both rare and distributed across the internet, and no one can take it from you if you store it offline.
WHAT EXACTLY IS BITCOIN?
Bitcoin can refer to either the asset (which is now worth 20,000 times its USD value) or the network (which is growing faster than the internet, Facebook, and Amazon combined).Digital rails (a shared distributed ledger where a record of all Bitcoin transactions is recorded) are dispersed over tens of thousands of devices and computers, allowing Bitcoin as an asset to move freely across the network. This digital asset is a 21st-century savings technology that allows you to keep value and money on a smartphone or hardware device known as a wallet using military-grade encryption.
Its purchasers can safely keep the results of their labour (or life force) and material wealth in a digital ledger protected by complex algorithms and cryptographic techniques (through inflation). Once you become fluent in bitcoin terminology, you'll see that anyone who has government-issued currency (which is all of us) is watching their wealth melt like an ice cube in the sun as the fiat value inflates and hyperinflates when evaluated against bitcoin. It's time for everyone to wake up and smell the coffee if they care about their wealth lasting into the future. This is especially true for parents who hope to leave their children a financial legacy. Even though Bitcoin is currently volatile, all signs point to it maintaining its value over the long term, while fiat currencies rapidly lose theirs.
THE BITCOIN NETWORK HAS NEVER BEEN HACKED
Over the next 13 years, Bitcoin's network reliability is unmatched.
IN A NUTSHELL, HOW DOES BITCOIN WORK?
The blockchain is the backbone of Bitcoin. The blocks that make up a blockchain are what give it its name. A new block is added to the blockchain every time it is verified. The process of rewarding miners with freshly created Bitcoin for solving the mathematical challenge used to confirm blocks is baked into the Bitcoin protocol. This is the technique that ensures the Bitcoin blockchain is always secure, but it is also quite energy-intensive.
Bitcoin mining is the resource-intensive process that issues new bitcoins and keeps a record of every bitcoin transaction ever made. Bitcoin miners turn energy from the actual world (both stranded and renewable) into a currency that will last longer than your grandkids. The more power bitcoin miners consume, the more secure and invulnerable the network becomes.
About every 10 minutes, the protocol releases 6.25 coins into circulation. In 2024, the issuance rate will decrease to 3.125 coins every 10 minutes, cutting the total supply in half.
As soon as a Bitcoin transaction is completed, its details are added to the next block. Once a block has been validated and added to the blockchain, it cannot be removed.
WHO MAKES USE OF BITCOIN?
Bitcoin's user base keeps growing. A rise of slightly less than 165 new Bitcoin users per minute was predicted for the first half of 2021 ("How Fast Is Bitcoin Growing?2021 ("How Fast Is Bitcoin Growing?"). This represents a huge increase in population as well as a substantial amount of development.
Bitcoin is the first digital currency to be recognised as legal tender by a government. Microstrategy, an intelligence software business in the Fortune 500, has designated Bitcoin as a major treasury reserve asset, making it the first and only asset of its kind to receive such a designation.
CEO Michael Saylor gave the following statement:
Our company's balance sheet went from being a declining asset to an appreciating one. So now there are two companies. Both are examples of businesses that are crucial to the modern economy, yet one is enterprise software and the other deals with digital property. The question then becomes, "Why did we do it?" I'm trying to play it safe by avoiding any actions that could cause financial harm or damage to the company's stock price. It's a waste of money. The second phase is an opportunistic one in which we may acquire premium real estate. In comparison to analogue property, digital property is superior. Strategic planning occurs throughout Stage 3. Before everyone moves to Cyber Manhattan, it's a smart idea to buy all the real estate. If I can borrow dollars at 5% interest and bitcoin is increasing in value by 100% per year, my arbitrage is 95%. So why wouldn't I go for it?
THERE’S A LOT OF NEGATIVITY ABOUT BITCOIN IN THE PRESS
Looking back through time, we see that it is unusual for a king to be ousted from his throne by an outsider without putting up some sort of resistance. Almost ever since it was first introduced by the Medici, the fiat banking system has dominated the financial world. This won't go away quietly. The fiat system has been able to set the conditions, and its personnel have reaped enormous rewards as a result. Bitcoin, the underdog King Arthur who triumphantly drew the sword from the stone, changed all that. And the governments and central banks approve of that? They don't do that at all.
This is a major factor in the propaganda campaign waged against bitcoin by governments and central banks.
Inquiring minds want to know the truth about such falsehoods. There is no foundation for it. Energy is being wasted. The situation is quite unstable. Billionaires have complete control over it. Nothing could ever be done with it. Criminals and terrorists are the main users. This is clearly a Ponzi scheme.
Rubbish. Bitcoin might cause a paradigm shift, which is why it's been vilified so much by the people now in power.
YOU CAN PURCHASE A FRACTION OF A BTC
Most of us probably don't have a spare $20,000 laying around that we could use to buy a complete Bitcoin. One bitcoin is equal to one hundred million Satoshis, so if you wanted to start with just $10, you could buy some bitcoin.
Conclusion
Bitcoin, the first cryptocurrency, was created to function as an alternative to traditional fiat cash. Since Bitcoin's inception in 2009, its popularity has skyrocketed and its applications have multiplied, giving rise to a plethora of other digital currencies. Bitcoin investment is less complicated than the Bitcoin generation process. Bitcoin can be purchased and sold by investors and speculators at crypto exchanges. Investors should carefully examine whether or not Bitcoin is the correct investment for them, as with any investment but especially one as new and volatile as Bitcoin.
FAQs
In what ways can I best describe Bitcoin to a non-technical audience?
In order to conduct financial transactions without the intervention of a central bank or other centralised authority, a growing number of people are turning to cryptocurrencies like Bitcoin (BTC).
How can Bitcoin be explained in the simplest terms?
Bitcoin is a digital currency that may be bought, sold, and exchanged directly without the use of a central authority or centralised institution like a bank. Satoshi Nakamoto, the inventor of Bitcoin, first articulated the need for "an electronic payment system based on cryptographic proof instead of faith."
Can you give a simple explanation of cryptography for newcomers?
Cryptocurrency, also known simply as "crypto," is a form of digital currency designed to function as a medium of exchange. It employs cryptography for transaction verification and security and to regulate the issuance of additional units of a certain digital currency.
That's all for today, see ya tomorrow! If you want more, be sure to follow our Twitter (@croxroadnews)
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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