Things Bitcoin Isn't
Bitcoin's most important aspect often gets lost in discussions about things bitcoin is not.
Things Bitcoin Isn't
Bitcoin is not:
a US dollar replacement
a gold replacement
a tool for criminals
a speculative investment
Let’s talk about that last one.
If you think bitcoin’s a speculative investment, then you might fall into one or both of the following buckets.
you live in a country with robust and relatively stable financial services and markets
you haven’t dug deeper than the headlines about what bitcoin is
So, What Is Bitcoin?
This isn’t discussed enough.
Bitcoin is THE most powerful and secure computing network ever.
Yes, bitcoin, as a trading asset, changes hands globally 24/7. But, the most important part about bitcoin is its network.
Trading markets reflect and appreciate the value of the network but people haven’t looked past the trading aspect of bitcoin enough yet. Bitcoin’s network is capable of creating, absorbing, and securing value for the short or long term.
The bitcoin network is ushering in a new era of financial ecosystems. It’s not competing with the US dollar because government-backed money still serves a short term purpose that bitcoin does not. Financial products for things like lending can be accomplished via bitcoin but it’s okay to leave that to fiat.
Bitcoin isn’t competing with gold either. It is a commodity, like gold. But, unlike gold, bitcoin is both money and a store of value simultaneously.
In Venezuela, the central bank no longer publishes inflation data. Hyperinflation is very real there. Other countries like Argentina have debased their currency a handful of times since the 1970s. Argentina is on the brink of yet another debasement. In these places, hard-earned money gets devalued overnight.
To citizens in countries with unstable currencies or unreliable governments, bitcoin is very much a better money and store of value.
A good money transmits value over space and time. Bitcoin never degrades. Gold is great in this same way. It can be melted down and recreated with little to no gold lost in the process. But, bitcoin’s fully verifiable and digital properties give it advantages over gold. It weighs nothing, is easily divisible, and is 100% auditable. There’s no fake bitcoin and it’s capable of being accepted everywhere.
These 3 all serve a purpose:
gov’t money
gold
bitcoin
Bitcoin is still introducing itself to the world.
More On What Bitcoin Is👇👇👇
Mania Comes First
Bitcoin’s new. It’s different.
To some, the opportunities associated with it are endless. To others, it’s purely a trade. And to others still, it’s absolute madness that should be ignored.
Warren Buffett and Charlie Munger double down on their distain for bitcoin whenever they’re asked about it. I don’t blame them either. They great at what they do and they don’t need bitcoin so it’s fine for them not to worry about it.
We’re in the mania stage.
We’ve been here since 2008-2009 when bitcoin entered the world. Bitcoin was discovered, not created. It was a feature of the broader internet and computing world that was unlocked by Satoshi Nakamoto. That feature is slowly being realized by people in the financial and tech industry. More importantly though, it’s being realized by the average person who, for better or worse, might come to bitcoin because they need it, not necessarily just out of curiosity.
15 Years Ago
15 years ago this month, we watched as Lehman Brothers filed for bankruptcy. With more than $600 billion in debt, it was a shot heard round the world.
One month later, the bitcoin white paper was released. We’re now approaching 15 years of bitcoin. Come January 2024, the bitcoin network will celebrate that milestone and it is something to celebrate.
The network is what matters. It matters more than bitcoin price, trading volume, or mainstream narratives. The network works and has for a decade and a half and everyday, more and more people are using it to store and transmit value over time and space. Its utility becomes apparent to new people the world over every single day.
15 years in…
We’re just getting started.
Thx for reading!
I am not an investment or financial advisor. All opinions expressed are mine alone. Read the full DISCLAIMER on the About page.
HODL on Garth.