This is your last chance. After this, there is no turning back. You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember: all I’m offering is the truth. Nothing more.The Matrix
“So what do you think about Bitcoin?” – A nice and simple way to guide the conversation away from mundane topics (ie anything non-Bitcoin related) towards Bitcoin. It is not assuming too much, not leading; just an open question that usually gets people talking, hopefully leading to interesting questions for me to answer.
A conversation is the best way to help someone understand Bitcoin in my opinion. You can hone in on exactly what information they need. When writing for a broad audience, this is not possible, unfortunately. I can’t be too succinct. But I’ll provide links to useful articles to avoid going too deep into details.
I’ve heard people say you need about 50 hours of research to fully grasp the magic of Bitcoin, but 10x that, about 500 hours, to be good at explaining it to someone else. If you are not confident in your ability to explain everything or answer any question, you can guide people to this article and website, or DM me if you are stuck on a question. When Orange Pilling, don’t fumble around, don’t make up answers. Refer on once you have done the crucial work of introducing the concept.
There is no point in discussing the solution without first revealing the problem.
What is money? Why does it have value? Why do prices go up, ALL THE TIME? Why are we told that is a good thing, and why do we believe it?
This article I previously wrote explains this and more. Read that, and come back.
You see now? Not quite? Then this injustice will make you angry: A superb article by Robert Breedlove, explains how those with the power to create money, or tamper with it, rob all those that use the money of their wealth. Silently.
If you want more, Jimmy Song has an excellent description of the problem too.
And finally, this is a great website, wtfhappenedin1971.com, showing some shocking data.
ADDITION NOVEMBER 2021: HARD MONEY (VIDEO)
Attempts by The People to create money have always been quashed by governments. It is not legal to use any other money but the money created by and controlled by the state. Friedrich Hayek, Austrian Economist, and Nobel Prize Winner, “predicted” the solution in an interview. Here is the quote, taken from a longer video.
“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop”Frederich Hayek
The marvel of the invention of Bitcoin was not just “digital money”, it was that it was money that can not be shut down by governments. It was introduced by Satoshi Nakamoto, in a sly roundabout way, and it grew as a network to a size now where they can’t stop it. The solution to unstoppable money has been the culmination of works by cypherpunks, from the development of the internet, public/private key cryptography, failed attempts at creating non-government money, to finally Bitcoin. This brilliant 4-part documentary goes over the history.
To understand why Bitcoin can’t be stopped, one is required to understand Bitcoin more deeply, and before that, to understand “what is good money?” I’m not talking about money that is forced on us by governments (fiat) – that is what we are trying to fight against. I’m talking about money that is freely chosen by The People. Money that evolves out of free choice; the free market at work. This beautiful piece by Vijay Boyapati is a famous document and does an excellent job of explaining free-market money.
Now that you’ve got a grasp of what free-market money is, now is the time to read about what Bitcoin actually is and a little about how it works. Reading this article will help (“A not too technical overview of this Bitcoin thing”). Then to go a little deeper, this is optional but recommended, Andreas Antonopoulos has an excellent lecture that I learned a lot from when I was first looking at Bitcoin. And at some point, every fully convicted Bitcoiner has read the “Bitcoin Bible” – it is a book by Saifedean Ammous, called The Bitcoin Standard, which I highly recommend you buy and read.
So hopefully now you understand why we need Bitcoin, and what Bitcoin is. Naturally, you have some objections or beliefs why you think this will fail. I’ve heard them all. I’m serious. And I have found an answer to them ALL. I will continue to add to this list as time permits.
Bitcoin will be banned!
Parker Lewis explains it well and I don’t need to re-write it.
A really good article by Beautyon, Why America can’t regulate Bitcoin
Bitcoin is for criminals!
So are shoes. We should ban shoes. More from Parker Lews.
Bitcoin is backed by nothing!
This is actually true, but that is not a problem. Money is a language, it needs no backing. It is a tool used to measure and transfer the value it represents, it is not actually valuable in itself and doesn’t need to be. It just needs to have excellent properties as money, AND it needs to be adopted by a network of people. Much like a spoken language, which has no “intrinsic” meaning, a language is just symbols and sounds, and a set of rules, that a group of humans choose to use and benefit from using. Good money is the same.
Gold, for example, is said to have an “intrinsic” value. It has value as something other than money. Many people mistakenly believe that this is necessary for money. While it helped gold evolve into money, once it became money, these properties are no longer needed. If gold lost all its monetary value, the physical properties are not worth enough to be of any meaningful compensation to those who wrongly chose it as money.
In summary, requiring money to be backed is incorrect. Currencies are backed. Backed by money. But money needs no backing. It is money because it has excellent properties, and has been chosen as money by the free market.
Do understand though, Bitcoin is not money… yet. It has the best properties, but it has not yet been adopted fully. It is becoming money. It is evolving. Gold took maybe hundreds or thousands of years to achieve monetary status. Bitcoin will be quicker, we just need to be patient.
Bitcoin wastes too much energy!
Bitcoin USES energy. That energy looks like a waste if you think Bitcoin is worthless. Not until you see the value in Bitcoin as the money for the planet, the benefit it brings by eliminating central banks, and the monetary oppression central banks conduct, then the discussion about energy is meaningless. Any energy used is wasted if Bitcoin is worthless to society.
But if you see the value, you can see that the energy it uses is TINY compared to the current corrupt financial system it will replace, and the war machine used to back the US dollar.
The energy Bitcoin uses is necessary to secure the network. The more valuable the network, the more energy will be consumed. It is not proportional to the transactions. The same energy will be used whether you make transactions or not.
The energy is used to prevent anyone from tampering with the monetary record. Transactions are FINAL. Immutable.
Alternative ways to secure the network have been proposed, but they do not work. The miracle of bitcoin is partly proof-of-work. Alternative solutions like proof-of-stake lead to centralisation of the network which is what Bitcoin is trying to replace: a centralised system of money where the few rich control the production of money.
and Nic Carter’s
It’s too Volatile to be money!
Correct. But Bitcoin is not money… yet. It is becoming money. And ANYTHING that is evolving into money in the free market, rather than being forced on us by governments, will be volatile as it is discovered.
The way to deal with this is to buy some regularly regardless of the price. This is called “Dollar Cost Averaging” (DCA). Or Euro Cost Averaging if Euro’s are forced upon you instead of dollars. You should buy what you can with your savings/income. Money that you can afford to lose so you are not stressed about the price. As you do this, learn more and more, and you will naturally be convinced of how worldwide adoption of Bitcoin as money is inevitable. This will then influence the amount of money you are comfortable in converting to Bitcoin. You will eventually realise that money you CAN’T afford to lose, you should put into Bitcoin. But this epiphany comes with many hours of research.
But Bitcoin can just be copied. It’s not scarce. There are so many altcoins!
Tuur Demeester’s 51 tweet thread on Ethereum is daming.
I will also add that all other cryptocurrencies are centralised and cannot resist government-shutdown. Bitcoin is the only decentralised money that can possibly replace fiat money. The only possible money we can adopt where no-one is in control. We don’t want anyone to have such power over the monetary system – In history, humans have proven not to be trustworthy when it comes to the temptations of printing more money. Any altcoin that happens to become larger than Bitcoin in popularity, is just evidence of people choosing an altcoin as their fiat money, with an altcoin creator as their central banker, rather than a government fiat with a traditional central banker. Either way, someone is in charge of The Money. This is not a solution to the problem. Bitcoin will just continue to grow as the only fair money of the people, where no one is in charge or can unilaterally change the rules.
The miners are concentrated in China. China can attack Bitcoin!
Preston Pysch Interview with Jimmy Song. At 37 min 35 seconds, Jimmy explains the futility of the double-spend attack. He also discusses a large re-org and the defence against it, where node operators can execute a command “disconnect block”. While it’s great this feature is available, I don’t know how to use it, and many others will not. Something for future awareness.
Andreas Antonopoulos explains the 51% Denial of Service attack and why it doesn’t work, and ultimately strengthens Bitcoin.
Quantum computers will kill Bitcoin one day!
This is an unrealistic concern.
Bitcoiners are too toxic!
To not invest in something because you don’t like the other investors – That is just ridiculous. But here is what you need to know bout the subject, courtesy of Tomer Strolight.
Bitcoin is infinitely divisible, so it’s not scarce!
This objection is ridiculous if you think about it a little I’ll help… Imagine a pizza cut into 21 slices, and you have a room full of hungry people. Slicing the pizza into finer and finer slices is not going to satisfy everyone’s hunger.
Another way to think of it, more mathematical – If you own 10.5 million bitcoins, you have half the total supply of 21 million bitcoin. Half the world’s wealth. Half the world’s purchasing power. If bitcoin changes its decimal places from 8 to 16, you still have half the supply and are no richer or poorer.
Yet another way – If you have a dollar bill, cutting it into 1000 pieces does not give you 1000 times as much.
That’s enough. Just think about it more if you don’t get it.
Bitcoin will never work as money because people can’t self custody
Yes, many people will not want to self custody, and be too scared to, or unable. That is fine. Banks can evolve to become businesses that help custody bitcoin – holding on to your money for safety… sort of what a bank is SUPPOSED TO DO. Instead, they take our money and gamble with it. When they fail, the central banks print money and bail them out, stealing from all of us by inflating the money supply.
The fact that anyone has the ability to self custody, and use Bitcoin in a trustless way, is all that is needed to prevent banks from exploiting people. So self custody with 100% uptake is not necessary for Bitcoin to succeed and solve the problems caused by fiat money.
Bitcoin can’t scale
There is no blockchain that can overcome this without sacrificing decentralisation. With more transaction throughput, more data needs to be stored by nodes. Running a node then becomes expensive. So not everyone would be able to afford to do so. With fewer and fewer nodes due to rising costs, the richest would be the ones that run nodes, and they end up deciding the rules of the monetary system. This is not good.
Instead of trying to make the base layer scalable, Bitcoin uses the lightning network to scale, a solution that is infinitely more scalable than even the VISA network. Lightning payments are instant, and final, and do not require a new token. They are real bitcoin transactions.
This is enough for now. As more objections arise, particularly the ones that annoy me, I will add more to this document.