the beauty of bitcoin
“There is no such uncertainty as a sure thing” — Robert Burns
You must have heard plenty of talk about bitcoin, maybe you’re heavily invested, or maybe you’re sick of the chat. Bitcoin is described as many things, a medium-of-exchange, a Ponzi scheme, a vessel for criminal activity, or a tulip-mania style fool’s errand, and a race to zero.
In reality, it is what you make of it. In (an attempt at) simple terms, Bitcoin is a peer-to-peer network, consisting of ‘nodes’. It has an indigenous token, ‘bitcoin’ or BTC, stored in ‘wallets’. Bitcoin are moved around the network in transactions. The transactions are facilitated by a special piece of hardware called a ‘miner’. Miners compete to solve a cryptographic puzzle, and the successful miner adds a new ‘block’ of transactions to the ‘blockchain’. On average, this happens every ten minutes. They are rewarded for this work by receiving an amount of freshly-mined bitcoin.
Nodes contain the full blockchain, the full list of transactions, and verify that every transaction follows the rules of the network, for example that the sender has more bitcoin than they are trying to send, they have the authority to send it, and the receiving wallet exists. In this way, once a transaction is sent, it cannot be reversed. There has never been a fraudulent transaction sent on the bitcoin network i.e. it’s impossible for your bitcoin check to ‘bounce’, and you can’t hold fake bitcoin on the network.
Anyone with an electricity supply can buy and hold bitcoin in a wallet, can run a node, and can even ‘mine’ bitcoin for themselves. This can all be done anonymously and without permission.
The supply of bitcoin is controlled by a piece of open-source computer code. The difficulty of the cryptographic puzzle increases as more miners attempt to solve it, keeping the average block time mentioned earlier to ten minutes. The number of bitcoin received by a successful miner is set by an algorithm. Currently the reward is 6.25 BTC. In 2024, the reward will halve to 3.125. This halving is programmed to occur every four years until the year 2140 when the last full bitcoin is mined at a rate of 0.00000168 BTC per day. There will only ever be a maximum of 21 million bitcoin on the network.
“Beauty and beautiful are powerful words, it’s more than just a physical thing.” — Scroobius Pip
The beauty of bitcoin for me lies in its integrity. The rules are the rules. The network was configured in its own way and can’t be changed. It is ‘decentralised’, there is no central authority. It is independent of ideology or prejudice. All are welcome, nobody is excluded, and nobody receives special treatment. The distribution of bitcoin is unequal, but the “haves” can’t use their influence to benefit at the involuntary expense of the “have-nots”.
This is what separates bitcoin from the wider market, known as ‘crypto’ and from central bank issued ‘fiat’ currencies like the euro. Crypto refers to a litany of projects, run by individuals or special interest groups. They maintain a certain level of control. Some are literal scams, and they are all doomed to obsolescence.
It is this independence and reliability that give bitcoin it’s market valuation. The price of 1 BTC reached €60,000, and currently sits at €35,000. People discuss how volatile the price of bitcoin is, without mentioning how every central bank issued currency is basically worthless relative to it in only 12 years that it has existed.
Government controlled, central bank issued currencies promise the world, and offer nothing. They say, “use our money, and we’ll provide healthcare, housing, policing, defence, opportunity, culture, education, food.” and they fail in every single category. Bitcoin promises nothing and delivers everything.
Think of it like a relationship. You might have been with someone who is deceitful, they say they have kicked their recreational drugs habit, or they take money from your purse, or they tell you things like “my mother is not at all overbearing and really quite sweet”. You might put up with it at first, but hopefully, if it persists, you get out before you lose faith in humanity, or worst of all, you become cynical at life itself.
Bitcoin is a relationship where everything is out on the table. There are no skeletons in the closet, take me as I am. It is difficult to end a relationship with your government when they’ve lied to you. It’s why people buy guns and bury gold under their house, or have Swiss bank accounts. They want some kind of safety net in case the government takes that break up too badly. Quoting Barack Obama, bitcoin allows anyone to have a Swiss bank account in their pocket.
Bitcoin is called a lot of things, but really it is what it is. It is an opportunity to transact freely with one another, without borders or national identities. It is also the freedom to hold an asset that cannot be eroded by inflation. It is this freedom that we crave, not the purported safety of a restrictive authority, and the number of people that realise this is growing larger every day.
