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    Bitcoin Bitcoin Newcomers FAQ - Please read!

    October 29, 2021

    Bitcoin Bitcoin Newcomers FAQ - Please read!

    Bitcoin Newcomers FAQ - Please read!

    Posted: 18 Jul 2021 11:56 AM PDT

    Welcome to the /r/Bitcoin Sticky FAQ

    You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.

    It all started with the release of Satoshi Nakamoto's whitepaper however that will probably go over the head of most readers so we recommend the following articles/books/videos as a good starting point for understanding how bitcoin works and a little about its long term potential:

    Some other great resources include Michael Saylor's Hope.com and "Bitcoin for Everybody"' course, Jameson Lopp's resource page, Gigi's resource page, and James D'Angelo's Bitcoin 101 Blackboard series. Some excellent writing on Bitcoin's value proposition and future can be found at the Satoshi Nakamoto Institute.

    If you are technically or academically inclined check out developer resources and peer-reviewed research papers, course lectures from both MIT and Princeton as well as future protocol improvements and scaling resources. Some Bitcoin statistics can be found here, here and here. MicroStrategy's Bitcoin for Corporations is an excellent open source series on corporate legal and financial bitcoin integration.

    You can also see the number of times Bitcoin was declared dead by the media (LOL) and what you could have earned if you didn't listen to them! XD

    Key properties of Bitcoin

    • Limited Supply - There will only ever be 21,000,000 bitcoin created and they are issued in a predictable fashion per the inflation schedule. Once they are all issued Bitcoin will be truly deflationary. The halving countdown tells you how much time until the next drop in block rewards.
    • Open source - Bitcoin code is fully auditable. You can read and contribute to the source code yourself.
    • Accountable - The public ledger is transparent, all transactions are seen by everyone.
    • Decentralized - Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can't be shut down similar to how Bittorrent works. You can even run a node on a Raspberry Pi.
    • Censorship resistant - No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint.
    • Push system - There are no chargebacks in bitcoin because only the person who owns the address where the bitcoin resides has the authority to move them.
    • Low fee scaling - Most wallets calculate on chain fees automatically but you can view fee estimates and mempool activity if you want to set your fee manually. On chain fees may rise occasionally due to network demand, however instant micropayments that do not require confirmations are happening via the Lightning Network, a second layer scaling solution currently rolling out on the Bitcoin mainnet.
    • Borderless - No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
    • Trustless - Bitcoin solved the Byzantine's Generals Problem which means nobody needs to trust anybody for it to work.
    • Pseudonymous - No need to expose personal information when purchasing with cash or transacting.
    • Secure - Blocks and transactions are cryptographically secured (using hashes and signatures) and can't be brute forced or confiscated with proper key management such as hardware wallets.
    • Programmable - Individual units of bitcoin can be programmed to transfer based on certain criteria being met
    • Nearly instant - From a few seconds on the lightning network to a few minutes on-chain depending on need for confirmations. Transactions are irreversible by normal users after one confirmation and irreversible by anyone (including miners) after 6 confirmations.
    • Peer-to-peer - No intermediaries taking a cut, no need for trusted third parties.
    • Portable - Bitcoin are digital so they are easier to move than cash or gold. They can be transported by simply carrying a seed (a string of 12 to 24 words) on a device or by memorizing it for wallet recovery (while cool, memorizing is generally not recommended due to potential for forgetting the seed and the potential for insecure key generation by inexperienced users. Hardware wallets are the preferred method for most users for their ease of use and additional security).
    • Scalable - While the protocol is still being optimized for increased transaction capacity, blockchains do not scale very well, so most transaction volume is expected to occur on Layer 2 networks built on top of Bitcoin.
    • Divisible - Each bitcoin can be divided down to 8 decimals, which means you don't have to worry about buying an entire bitcoin.
    • Designed Money - Bitcoin was created to fit all the fundamental properties of money better than gold or fiat

    Where can I buy bitcoin?

    Bitcoin.org and BuyBitcoinWorldwide.com are helpful sites for beginners. You can buy or sell any amount of bitcoin (even just a few dollars worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also check out the bitcoinity exchange resources for a larger list of options for purchases.

    You can also purchase in cash with local ATMs. Services such as CardCoins let you purchase bitcoin with prepaid gift cards. If you would like your paycheck automatically converted to bitcoin use Bitwage.

    Note: Bitcoin are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year.

    Securing your bitcoin

    With bitcoin you can "Be your own bank" and personally secure your bitcoin OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoin for you.

    • If you prefer to "Be your own bank" and have direct control over your coins without having to use a trusted third party, then you will need to create your own wallet and keep it secure. If you want easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor, Ledger or ColdCard is recommended.

    • If you cannot afford a hardware wallet there are many software wallet options to choose from depending on your use case. Mobile wallets like BlueWallet are generally more secure than desktop wallets. Beware of fake mobile wallets and check reviews from reputable Bitcoin websites. Avoid paper wallets or brain wallets.

    • If you prefer to let third party "Bitcoin banks" manage your coins, try Gemini or Unchained Capital but be aware you may not be in control of your private keys in which case you would have to ask permission to access your funds and be exposed to third party risk. There is a saying in the community, "Not your keys, not your coins" meaning if you don't store your coins in a wallet that you control the keys to then you do not really own your bitcoin as you have to ask permission from the third party in order to move them.

    Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!

    2FA requires a second confirmation code or a physical security key to access your account making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.

    Avoid using your cell number for 2FA. Hackers have been using a technique called "SIM swapping" to impersonate users and steal bitcoin off exchanges.

    Google Auth Authy OTP Auth andOTP
    Android Android N/A Android
    iOS iOS iOS N/A

    Physical security keys (FIDO U2F) offer stronger security than Google Auth / Authy and other TOTP-based apps, because the secret code never leaves the device and it uses bi-directional authentication so it prevents phishing. If you lose the device though, you could lose access to your account, so always use 2 or more security keys with a given account so you have backups. See Yubikey or Titan to purchase security keys.

    Both Coinbase and Gemini support physical security keys.

    Watch out for scams

    As mentioned above, Bitcoin is decentralized, which by definition means there is no official website or Twitter handle or spokesperson or CEO. However, all money attracts thieves. This combination unfortunately results in scammers running official sounding names or pretending to be an authority on YouTube or social media. Many scammers throughout the years have claimed to be the inventor of Bitcoin. Websites like bitcoin(dot)com and the r / btc subreddit are active scams. Almost all altcoins (shitcoins) are marketed heavily with big promises but are really just designed to separate you from your bitcoin. So be careful: any resource, including all linked in this document, may in the future turn evil. As they say in our community, "Don't trust, verify".

    • Avoid using ad-based search engines like Google or Yahoo: ads are shown based on how much the advertiser bids, and scammers can easily outbid legitimate providers for ad space, since immoral ways of earning money are far more lucrative than moral ways. Use DuckDuckGo instead, which has no ads, and never tracks you as well.
    • Ignore private messages offering services.
    • Never enter your seed words in a website of any kind. Hardware wallets will recover by displaying possible seed words on their own interface, never on a website.
    • Always check addresses on your hardware wallet before sending or receiving. Some malware has been known to replace addresses in your web browser or that you copy-and-paste.
    • Avoid clicking on links like that look like links, such as https://www.google.com/, without first hovering over it and actually checking where they go to. Just because a link is labelled with an HTTPS address does not mean it actually sends you to that address. It is trivial for someone to comment a link on Reddit that looks like it will send you to one website when it actually sends you to another, and you might not notice the difference until a scammer has gotten all your money, or you have downloaded and installed software that steals your money.

    Common Bitcoin Myths

    Often the same concerns arise about Bitcoin from newcomers. Questions such as:

    • Is Bitcoin a Ponzi scheme?
    • Will governments ban Bitcoin?
    • Will quantum computers break Bitcoin?

    All of these questions have been answered many times by a variety of people. Here are some resources where you can see if your concern has been answered:

    Where can I spend bitcoin?

    Check out spendabit, bitcoin directory or Coinmap for millions of merchant options. Also you can spend bitcoin anywhere visa is accepted with bitcoin debit cards such as the CashApp card or Fold card. Some other useful site are listed below.

    Store Product
    Bitrefill, Gyft Gift cards for thousands of retailers worldwide including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
    Spendabit, Overstock and The Bitcoin Directory Retail shopping with millions of results
    NewEgg and Dell For all your electronics needs
    Piixpay, Bitbill.eu, Bylls, Coins.ph, LivingRoomofSatoshi, Coinsfer, and more Bill payment
    Menufy and Takeaway Takeout delivered to your door
    Expedia, Cheapair, Destinia, Abitsky, SkyTours, the Travel category on Gyft and 9flats For when you need to get away
    Cryptostorm, Mullvad, and PIA VPN services
    Namecheap, Porkbun Domain name registration
    Stampnik Discounted USPS Priority, Express, First-Class mail postage

    There are also lots of charities which accept bitcoin donations.

    Merchant Resources

    There are several benefits to accepting bitcoin as a payment option if you are a merchant;

    • 1-3% savings over credit cards or PayPal.
    • No chargebacks (final settlement in 10 minutes as opposed to 3+ months).
    • Accept business from a global customer base.
    • Increased privacy.
    • Convert 100% of the sale to the currency of your choice for deposit to your account, or choose to keep a percentage of the sale in bitcoin if you wish to begin accumulating it.

    If you are interested in accepting bitcoin as a payment method, there are several options available;

    Can I mine bitcoin?

    Mining bitcoin can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read the mining FAQ. Still have mining questions? The crew at /r/BitcoinMining would be happy to help you out.

    If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node. You can view the global node distribution for a visual representation of the node network.

    Earning bitcoin

    Just like any other form of money, you can also earn bitcoin by being paid to do a job.

    Site Description
    WorkingForBitcoins, Bitwage, Cryptogrind, Coinality, Bitgigs, /r/Jobs4Bitcoins, BitforTip, Rein Project Freelancing
    Lolli Earn bitcoin when you shop online!
    OpenBazaar, Purse.io, Bitify, /r/Bitmarket Marketplaces
    /r/GirlsGoneBitcoin NSFW Adult services
    A-ads, Coinzilla.io Advertising

    You can also earn bitcoin by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoin for a small fee (requires you to already have some bitcoin).

    Bitcoin-Related Projects

    The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.

    Project Description
    Lightning Network Second layer scaling
    Liquid, Rootstock and Drivechain Sidechains
    Hivemind Prediction markets
    Tierion and Factom Records & Titles on the blockchain
    BitMarkets, DropZone, Beaver and Open Bazaar Decentralized markets
    JoinMarket and Wasabi Wallet CoinJoin implementation
    Decentralized exhanges Decentralized bitcoin exchanges
    Keybase Identity & Reputation management
    Abra Global P2P money transmitter network
    Bitcore Open source Bitcoin javascript library

    Bitcoin Units

    One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:

    Unit Symbol Value Info
    bitcoin BTC 1 bitcoin one bitcoin is equal to 100 million satoshis
    millibitcoin mBTC 1,000 per bitcoin used as default unit in recent Electrum wallet releases
    bit bit 1,000,000 per bitcoin colloquial "slang" term for microbitcoin (μBTC)
    satoshi sat 100,000,000 per bitcoin smallest unit in bitcoin, named after the inventor

    For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:

    • 0.001 BTC
    • 1 mBTC
    • 1,000 bits
    • 100k sats

    For more information check out the Bitcoin units wiki.

    Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /r/Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit.

    Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.

    Welcome to the Bitcoin community and the new decentralized economy!

    submitted by /u/BitcoinFan7
    [link] [comments]

    Daily Discussion, October 29, 2021

    Posted: 28 Oct 2021 10:04 PM PDT

    Please utilize this sticky thread for all general Bitcoin discussions! If you see posts on the front page or /r/Bitcoin/new which are better suited for this daily discussion thread, please help out by directing the OP to this thread instead. Thank you!

    If you don't get an answer to your question, you can try phrasing it differently or commenting again tomorrow.

    Join us in the r/Bitcoin Chatroom!

    Please check the previous discussion thread for unanswered questions.

    submitted by /u/rBitcoinMod
    [link] [comments]

    Bears are trying desperately to keep btc below 60k for Friday’s options expiry

    Posted: 28 Oct 2021 11:43 AM PDT

    Let's bleed them out

    submitted by /u/Carlos_Silverman
    [link] [comments]

    The Bitcoin Boomer Gary Leland, giving a quick advice to TikTokers

    Posted: 28 Oct 2021 11:56 PM PDT

    Matt Damon: Fortune favours the brave

    Posted: 28 Oct 2021 07:43 PM PDT

    I Bought A Pizza with BITCOIN ⚡️ in Prague

    Posted: 28 Oct 2021 01:29 PM PDT

    Am I crazy for holding 90% cash : 10% BTC?

    Posted: 28 Oct 2021 02:52 PM PDT

    I'm very bullish for BTC, particularly over the next few months after recently discovering Plan B's stock 2 flow model and his predictions for Sept/Oct/Nov/Dec.

    However, I'm also wary of something I don't know about cropping up and causing a crash in the price. Like what? IDK, the US banning it, or thousands of wallets being emptied because of a flaw that no one knew about the day before. Basically any unknown unknown.

    As the title says, I've got 10% BTC and 90% cash (getting zero interest).

    If I increased the ratio of BTC, I'm not sure I'd sleep at night (already a long term insomnia sufferer).

    So, is 10% the right amount for me? What would you do in my situation?

    submitted by /u/z1gz1g
    [link] [comments]

    Is 0.1 Bitcoin good to buy a Hardware wallet?

    Posted: 28 Oct 2021 10:04 PM PDT

    People say you should take custody of your Bitcoins. I have accumulated 0.1 Bitcoin and have it on an exchange. Should I buy a hardware wallet? I also have the fear of losing the key phrase but that we cannot avoid.

    Is Safepal wallet a good hardware wallet? I think it is cheap and has a good number of features.

    Tips from Holders are appreciated.

    submitted by /u/akshaykmvlly
    [link] [comments]

    This song says it all

    Posted: 29 Oct 2021 12:04 AM PDT

    Biden on Bitcoin

    Posted: 28 Oct 2021 12:11 AM PDT

    No, Bitcoin is not controlled by a small group of investors and miners (A rebuttal to the TechSpot article)

    Posted: 28 Oct 2021 05:29 AM PDT

    No, Bitcoin is not controlled by a small group of investors and miners (A rebuttal to the TechSpot article)

    https://preview.redd.it/vli0ofqwf6w71.jpg?width=3840&format=pjpg&auto=webp&s=2a704c47375637858c27216379ae8313dadf8be8

    This could be a long read. Kindly bear with me.

    I write this primarily in response to the TechSpot article from yesterday (r/technology mods told me they only allow "mainstream articles with editorial oversight and fact-checking" so I'm sharing this here).

    But I'd also like to take this opportunity to write about Bitcoin more broadly as someone who has been following it for more than a decade and I'll try to do so without complicating the conversation for anyone unfamiliar with Bitcoin.

    The TechSpot article cites a non-peer-reviewed National Bureau of Economic Research (NBER) working paper from Igor Makarov and Antoinette Schoar.

    NBER claims to be non-partisan but it is a private NPO funded by the likes of Bill Gates foundation.

    The chairman of NBER, Karen Horn, is a former president of the Federal Reserve Bank of Cleveland and Head of International Private Banking for Bankers Trust.

    The authors of this working paper, Igor Makarov and Antoinette Schoar are no experts in Bitcoin.

    Makarov is employed by Financial Markets Group (FMG), which focuses on policy research into financial markets and works alongside banks and regulators in Europe.

    Schoar is a professor at the MIT Sloan School of Management and co-chair of NBER Corporate Finance group, who has previously made it clear that she is no fan of Bitcoin with some pretty misguided takes on it.

    It's critical to note that the data regarding miners cited in this study is from when mining was largely concentrated in China. This is no longer the case.

    The paper claims the authors have "the ability to trace miners on the blockchain." The tracking method shown in the paper is based on subjective, unverified "algorithm to track the distribution of mining rewards from the largest 20 mining pools to the miners that work for them."

    The validity of this conjectural method of tracking was also subjectively verified before all mining operations migrated out of China to many different parts of the world.

    ​

    Bitcoin distribution is not highly concentrated

    The first thing we need to acknowledge with Bitcoin is that it is still very much a nascent monetary system. It has come a long way in a short space of time but it's only been around 13 years and only 3% of the world's population currently use Bitcoin.

    It took the Internet 25 years to get to that point. So while adoption is certainly happening a lot quicker, we still have 97% of the world's population to bring on board. Unlike the banking system, which has ostracized nearly half of the world's adult population, Bitcoin can actually work for every person in the world, no matter who they are or where they come from.

    The top wallet addresses here do not belong to individuals. Almost all active addresses holding greater than 10 basis points of the total supply (greater than 0.1%) are addresses belonging to exchanges and custodial services holding custody of Bitcoin that belong to millions of individual users. Not all exchange addresses have been tagged by bitinfocharts. For instance, the third largest address, looking at activity and transaction patterns, very likely belongs to Coinbase.

    Now you're not supposed to be holding your Bitcoin in exchanges as that defeats the whole point of Bitcoin, besides enabling rehypothecation, which can artificially inflate the supply, and other security risks, but a lot of people do since they're new to Bitcoin, unfamiliar with the concept of self-custody, and inadequately appreciate the purpose and potential of Bitcoin. There are ongoing educational efforts to encourage people to take ownership of their Bitcoin.

    Not your keys. Not your sats.

    The wealth distribution is admittedly far from where it needs to be, but it's heading in the right direction. As more and more users adopt Bitcoin, the Gini index improves markedly. The game theory embedded into the protocol ensures that it does over time. The article from TechSpot claims that 10,000 individuals control a third of the supply. This, even if we assume to be accurate at face value, is a vastly improved figure from only 2 years ago, when less than 5000 wallets were estimated to own half the supply.

    On-chain analytics firm, Glassnode, published a finding earlier this year that ownership of Bitcoin is not highly concentrated and it naturally disperses over time. I'll explain a little later in this article why that is the case.

    ​

    Beyond the cryptocurrency

    Let's try to first understand Bitcoin beyond the cryptocurrency, as a software protocol and what it represents for humanity. Sure, price speculation is fun but for me, it's the least interesting aspect of Bitcoin.

    Bitcoin is open-source software collectively hosted by a pure P2P permissionless network of ∼ 60,000 nodes distributed across the world — by far the largest pure P2P network ever. Anyone in the world can propose changes to this software no matter who you are. There's no central server or hierarchical structure to this network. You don't need anyone's permission to access the network. We don't need to know who Satoshi was to trust the system because the code is open for every single human being in the world to read and scrutinize. Satoshi was simply the first, founding contributor to this open software.

    This is such a revolutionary egalitarian concept so far removed from all the corruption and iniquities that inhere within our extant hierarchical technology and monetary systems that a lot of people understandably find it difficult to grasp but this could fundamentally fix the world and make money and technology at large work for everyone without privileges.

    There's a common misunderstanding that Bitcoin has great value because it was the first digital currency. This is untrue. There were several prior attempts — B-money, Bit gold and Hashcash the most prominent among them. Satoshi's proof-of-work (PoW) algorithm solved a critical flaw in the use of blockchain as a public ledger known as the Byzantine Generals Problem (BGP).

    Solving for BGP meant that we could have an open ledger network without a central server or middlemen where nobody had to trust anybody else for the system to work. Every node within the Bitcoin network is a server with a live copy of the ledger and each node is able to verify the authenticity of its copy of the ledger without having to trust any of the other nodes.

    The concept of blockchain predates Bitcoin by almost two decades. So the value was never in blockchain but the way Bitcoin was able to utilize blockchain as a trustless, permissionless, decentralized public ledger to democratically create, distribute and exchange value.

    On the face of it, it's easy to mischaracterize Bitcoin as some kind of an investment scheme. It is absolutely not that (The Newcoiner Dilemma). Who is to benefit from an investment scheme where nobody is in charge?

    Bitcoin is a complete revamp of our monetary system to make it work for everyone and more broadly, as a software protocol, Bitcoin has the potential to fix the Internet's original sin — centralization at the hands of few privileged gatekeepers — and restore it to its originally intended form as a decentralized P2P network protocol.

    A network protocol is only decentralized if any participant within the network is able to access and verify the truth (the state of the ledger) on their own in a very economical manner without requiring permission or trust. We've seen many predatory knock-offs since Bitcoin, which are little more than snake-oil marketing gimmicks with fundamentally flawed protocol designs and centralized node architectures. Cynical rent-seeking and exploitation just comes with the territory for any revolutionary technology.

    Permissioned, quasi-permissioned, DINO (decentralized in name only) blockchains are a waste of time. Blockchains are comparatively inefficient databases unless truly decentralized. What makes them special is the ability to individually host, validate and audit the ledger.

    Throughout Bitcoin's history, Bitcoiners have staunchly defended the right of users of the network not to be priced out of running their own node, most famously 4 years ago when Bitcoin users stood firm in the face of pressure from miners and corporate interests to prove that it was the users who truly controlled Bitcoin, not miners and not wealthy investors.

    Anyone can host their own Bitcoin full node on a Raspberry Pi. This allows them to be an equal rights citizen within the network without delegating trust to a third party. If you cannot self-host a node on your own, you're going from trusting bankers to trusting a random person on the internet. That doesn't seem so revolutionary, does it?

    ​

    How does such a network scale?

    Let's take the Internet as an example. The IP suite is a software protocol like Bitcoin. It originally had a monolithic design until we figured out that it could not scale without layered architecture. Bitcoin has undertaken a similar multi-layered approach to scaling in recent years.

    Bitcoin's base layer is the network layer protocol and the monetary settlement layer. Priorities for this layer are maximizing security and trust-minimization. Built on top of this is a payments layer called Lightning Network.

    Lightning Network is a decentralized layer-2 network protocol that uses a native smart contract scripting language to enable instant, almost feeless, global Bitcoin payments.

    In Lightning Network, parties to a transaction are required only to have a sufficiently funded open channel active in the network. This is done through a single on-chain transaction.

    If there is a direct channel open between the parties, the transaction is routed directly and incurs no fee. Without a direct channel, the transaction is routed through routing nodes, incurring a small fee, typically no more than a few sats (fraction of a cent), paid to routing nodes hosted by users of the network.

    You can find a live node map for Lightning Network here. It's pretty remarkable how far Lightning Network has come in only 3 years.

    With Lightning Network's maturation as an infinitely scalable decentralized global payments network, Bitcoin is shifting focus to its next big milestone, Taproot, which is due to go live in mid-November at block height 709632.

    Taproot brings a set of protocols that enhance Bitcoin's privacy, scalability and unlocks the path for seamless integration of application protocols on top of Bitcoin while also ensuring that users are still able to economically run their own Bitcoin full node.

    ​

    Game Theory of Bitcoin

    Cypherpunks were pursuing the concept of Bitcoin, a decentralized P2P monetary system, for two decades. Satoshi completed the final, most important, piece of the jigsaw — solving the Byzantine Generals Problem to prevent double-spend.

    In doing so, Satoshi sought to address two fundamental flaws with fiat money,

    1- Centralized, focused issuance and control of money supply and monetary policy

    2- Trivial cost of issuance

    While issuance entails no cost, the money remains at the mercy of the basest of human qualities, self-seeking greed. All corruptive tendencies of fiat money are a direct consequence of the trivial cost to issue infinite money.

    Satoshi's proof-of-work algorithm solved for these two flaws by implementing an ingenious cost of issuance algorithm that keeps every actor honest and forever scales in proportion to Bitcoin's value as a monetary network —the higher Bitcoin's value, the higher the cost of issuance.

    Proof-of-work requires those who acquire the new supply of coins (miners) to continually input real-world work for their rewards and cover recurring operational costs. The work ensures that those who receive the new supply of money cannot keep hoarding it for themselves. Miners are forced by the game theory embedded into the protocol to redistribute Bitcoin into the market.

    Any monetary system where the creation of money entails no work and cost would be fiat 2.0 all over again, a system where wealth equals power, where the rich forever get richer and the poor get poorer.

    In proof-of-work, wealth != power

    Miners input work and recurring costs to find blocks and receive compensation for their work but the blocks are validated by full node users, not miners. Full nodes enforce the rules — accept or reject blocks found by miners — and hold the power to keep miners honest. Every full node user has one vote. Proof-of-work admits of no corruption or privileges.

    A very large portion of the world's population is affected by either hyperinflation and/or lack of banking services (c. 4 billion people). Bitcoin allows them to connect to an open, permissionless network to generate, store and exchange value where nobody can stop them. The combination of proof-of-work and economical self-hosted nodes distributed all across the world is what ensures Bitcoin's antifragility, securing the network from state attacks.

    ​

    Bitcoin, a global leader in clean energy innovation

    20 years ago, the Internet was boiling the oceans. Today, it's Bitcoin. In 20 years, the next emerging technology. Energy, in manifold forms, has always been fundamental to human interaction and its impact, an ineluctable consequence of human evolution.

    Bitcoin is at once the most fundamentally important technological and monetary evolution for humanity. For the first time in human history, every human on earth can become financially sovereign, set free from the whims of other humans.

    Bitcoin is a huge net positive for humanity and a global leader in renewable energy innovation. The renewable energy share of the Bitcoin network is over 4 times that of the average grid. In 2020, renewable energy sources accounted for only about 12% of total U.S. energy consumption. 58% of global Bitcoin mining operations are powered by renewables.

    According to the Energy Information Administration (EIA), 66% of the primary energy used to create electricity is wasted by the time the electricity arrives at the customer meter. Bitcoin is able to harness stranded/wasted energy, while also mitigating the climate effects of other industries by capturing flared gas that would otherwise be vented into the atmosphere contributing to climate change. Other industries find the cost of transporting energy prohibitive. With regards to coal, almost all of the coal-powered mining was happening in China. They've all since been shut down.

    ​

    The quest for perfect money

    What's money? Anything that's accepted as representing value by the parties to any transaction. It's really that simple. Three thousand years ago, cowrie shells were used to represent value. We've had various forms of money since but the quest remains the same. Humans have always sought money that can hold value over time until it was required to purchase other things that hold value to them — goods and services.

    If we look at money from this perspective, we could argue that money is technology but until now, we never had the technology to come up with a money that was able to fulfill all three functions of money — store of value (SoV), medium of exchange (MoE) and unit of account (UoA).

    Bitcoin is at once a good SoV (scarce and incorruptible), a good MoE (the payments layer — Lightning Network), and a good UoA (infinite divisibility and instant portability across the world).

    I view Bitcoin to be the culmination of humanity's 7000-year technological quest to perfect the representation of value by truly democratizing its creation, distribution and exchange. Never before have we had a money with all the necessary properties of sound money. All previous forms of money had compromises.

    Scarce money has always been sound money but previous iterations of scarce money lacked the other properties required to be viable as MoE and UoA — fungible, readily portable, infinitely divisible, incorruptible, indestructible, provably finite and objectively verifiable.

    Bitcoin ticks all the boxes. It further adds a new dimension to money hitherto unimaginable, obviating the need for trust, eliminating counterparty risk without the burden, cost and attendant inefficiencies of involving trusted middlemen.

    ​

    Triffin paradox

    The Triffin paradox explains why any sovereign currency serving as a global reserve currency is unworkable — the state issuing the reserve currency is required to continually run up a deficit to meet the world's demand for its currency. This creates a conflict of interest between domestic and international monetary policies, which becomes untenable in the long run, leading to the collapse of the system. The average lifespan for reserve currencies is 95 years.

    Bitcoin is the only monetary system in history that has the properties to last forever, for, unlike all previous monetary systems, it doesn't derive value from the authority or wealth of the issuer, which is fleeting, but a timeless universal constant — hard-coded mathematics.

    ​

    Fiat money is a pyramid scheme

    It would be remiss not to highlight at this time just how unfair our current monetary system is and, something we don't often speak of, the jarring impact of inflation-driven compulsive consumerism on climate change.

    The current system of credit constantly incentivizes you through a myriad of machinations to keep spending money from tomorrow's labor, but the new injection of money from your tomorrow's labor ends up being concentrated at the top, with the ultimate consequence of inequitably diminishing your purchasing power and continually enriching those at the top of the pyramid.

    In short, money borrowed against your future labor ends up destroying your own purchasing power while the lender profits off your future labor, both in the form of interest and by being closer to the new money. It's a double whammy. Fiat money post hoc undercuts the value of our work and time, except for the top 0.01%, some of whom have seen their wealth grow almost 10-fold during a once-in-a-hundred-year global pandemic.

    In 1971, President Nixon canceled the convertibility of the US dollar to gold. The subsequent collapse of the Bretton Woods system gave central banks absolute monetary authority as the dollar was no longer required to be backed by gold reserves.

    Central banks' newfound ability to continually manipulate supply, interest rates, and velocity of money has led to deleterious consequences. Perpetual expansion to spur illusory "economic growth" has sent deficits spiraling out of control and resulted in, inter alia, a vicious cycle of high inflation, recession as a consequence of efforts to mitigate the effects thereof and ever-increasing, now extreme, economic inequality.

    I'll just leave it here as for the enduring effects of the Nixon shock.

    ​

    Closing thoughts

    I'd like to earnestly urge everyone to read mainstream articles about Bitcoin through a lens of scrutiny as to the interests of those who own these organizations. There's an ongoing campaign to poison the well with blatant disinformation while simultaneously accumulating Bitcoin for themselves.

    When you really burrow down the Bitcoin rabbit hole, you come to realize that Bitcoin is quite the culture shock, a monetary paradigm shift irreconcilable with the status quo sustained by immoderate expansion normalized through generational indoctrination of the rationally vulnerable to acquiesce to furtive post hoc theft of the value of their work and time, especially in the last 50 years post-Nixon shock.

    Mainstream media organizations are owned by the banking establishment and beneficiaries of the fiat pyramid scheme who stand to lose a lot of power if 8 billion people were to understand the peaceful revolution that is Bitcoin.

    There are no C-suites, marketing/PR teams in Bitcoin to manipulate public opinion or issue any official statements in rebuttal to intellectually dishonest journalism. Bitcoin keeps plowing along honestly, paying no mind to assorted naysayers motivated by self-interest seeking to further various agendas.

    Tick.. tock.. next block..

    ​

    https://i.redd.it/86izkxf9g6w71.gif

    ​

    I hope the irony of an organization chaired by a former Federal Reserve president decrying the concentration of wealth in Bitcoin while we do not have the ability to peer into an open ledger to scrutinize the concentration of wealth and the transactions of bankers in the fiat monetary system is not lost on anyone.

    Bitcoin fixes this

    submitted by /u/xcryptogurux
    [link] [comments]

    Can’t be stopped, won’t be stopped. True decentralization

    Posted: 28 Oct 2021 08:29 PM PDT

    MicroStrategy added 9,000 BTC last quarter, its stash is now worth $7 billion

    Posted: 28 Oct 2021 09:31 PM PDT

    Bitcoin is amazing

    Posted: 28 Oct 2021 07:00 PM PDT

    I starting buying Bitcoin in April and when it dipped this sub convinced me to hodl and dca. I kept buying though the dip and this is the first time in my life I have any type of financial buffer. Bitcoin is magic

    submitted by /u/Live_Material_265
    [link] [comments]

    Bitcoin hashrate returns to May levels and points to a new all-time high

    Posted: 28 Oct 2021 05:14 PM PDT

    El Salvador now has 1,120 bitcoins after its last purchase

    Posted: 28 Oct 2021 01:17 PM PDT

    Fortune favours the brave. An ad featuring Matt Damon about crypto investment.

    Posted: 28 Oct 2021 06:45 PM PDT

    Imagine borrowing 1 BTC today and paying back the 1 BTC over 10 years...you'd owe way more. Will bitcoin cancel/reshape loans?

    Posted: 28 Oct 2021 10:33 PM PDT

    El Salvador takes advantage of the fall and adds another 420 Bitcoins to its reserves

    Posted: 28 Oct 2021 03:25 PM PDT

    ** political post alert**

    Posted: 28 Oct 2021 04:38 PM PDT

    How can anyone who holds crypto support the current administration? I know I may sound like a trumpy but here me out. The new infrastructure bill will place devastating regulations on crypto as well as new tax policies that will take more money out of our pockets. They are now pushing mass surveillance of all American bank accounts so every transaction can be taxed as well as a bill to tax unrealized gains. This seems to go against everything bitcoin and other cryptos stand for. I know republicans are corrupt af as well but at least they weren't trying to crush as with taxes. Anyways we can argue in the comments now.

    submitted by /u/billgravens
    [link] [comments]

    EL SALVADOR NOW OWNS 1120 BITCOIN AS PRESIDENT BUKELE BUYS 420 MORE

    Posted: 28 Oct 2021 04:57 PM PDT

    New Bitcoin hash rate highs remove any trace of China mining ban

    Posted: 28 Oct 2021 10:08 PM PDT

    Just a reminder that Bitcoin is disruptive ��

    Posted: 28 Oct 2021 11:25 AM PDT

    Bitcoin is disruptive to:

    • Gold
    • Governments
    • Global Warfare

    In Bitcoin 's wake: gold once again becomes a shiny industrial metal, governments once again become localized private protection services, and global warfare finally becomes a relic of the central banking era.

    submitted by /u/brooklynhunter57
    [link] [comments]

    Just visited /btc, had no idea it was that cult like

    Posted: 28 Oct 2021 12:28 PM PDT

    Then I started to think. Aren't we the same? Well , no. I love post about the technical talk on this sub. They only talk about the "flipping" because you know.. btc is worthless according to them. I find that very interesting considering they are only relevant because bitcoin is in their name. Anyway sad to see such tribalism in the crypto community also sorry for the rant.

    submitted by /u/ResponsibleLeg88
    [link] [comments]

    Happy Halloween!

    Posted: 28 Oct 2021 03:29 PM PDT

    El Salvador Fuels A Bitcoin Spike By Being An Active Buyer During The Recent Dip

    Posted: 28 Oct 2021 05:17 AM PDT

    Wharton Business School to Accept Tuition Payment in Bitcoin

    Posted: 28 Oct 2021 07:44 AM PDT
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