Bitcoin Is Far More Than An Investment

Over the past few years, huge numbers of people have come to see Bitcoin as an investment… as a stock. That’s because a significant percentage of the populace – certainly a good percentage of the investing class – knows someone, at least a friend of a friend, who has done very well with Bitcoin. That’s the kind of thing that people notice, and not unreasonably so.

The truth, however, is that Bitcoin is more and better than an investment… much more and much better.

We’ll get to some detail on this later, but before I start on the story of Bitcoin, I should at least say that rather than being an investment (even though its exchange price does rise dramatically), Bitcoin is actually a new societal model. It is fundamentally different from the old model, being both more efficient and morally superior.

It Came From Outside

Now, let’s spend a few minutes on where this thing came from. And the short version is that it came from outside.

Bitcoin, you see, is not an adaptation based on existing currencies, nor can it be understood that way. Bitcoin is from the realm of radicals.

In particular, Bitcoin came to us from the cypherpunks, a group of cryptography advocates. They began to flourish in the early 1990s, as they realized they could “wall-off” areas of cyberspace from the intrusions of governments. Here, to give you some flavor, are a few quotes from these people:

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us.

We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.

A specter is haunting the modern world, the specter of crypto anarchy.

Arise, you have nothing to lose but your barbed wire fences!

These were not financial people, cobbling together a new investment that would make them rich: These were people intent on building a better world.

Impeccable Foundations

Perhaps more important is that Bitcoin’s foundations are just about the firmest imaginable; immeasurably firmer than government money, and even firmer than gold.

The foundation of Bitcoin, that is to say, is mathematics, which is built into the very structure of our universe.

Cryptography is math, involving the multiplication of large prime numbers. It gets more complex from there, but that’s the core of it. And Bitcoin is built with cryptography; it uses cryptographic keys and hashes (you can think of a hash as a signature) to secure the transactions. And to grasp the power of this, consider that Bitcoin hashes are 16 to the 40th power (1640). That’s a completely astronomical number; it’s not going to be guessed.

Cypherpunks used to say that “You can’t put a bullet through a math problem,” and they were quite right to do so. Fundamentally, Bitcoin’s foundation is as strong as the proposition that two plus two equals four.

More concretely, Bitcoin it is a computer program that operates on tens of thousands of computers simultaneously, running math problems: All the “blocks” of Bitcoin transactions, chaining one-to-another, are simply math problems that have been solved. The first computer to solve the current problem – a Bitcoin mining computer – is allocated a reward for doing so.

And here’s the crucial thing about Bitcoin – the stroke of genius that makes is so terribly important:

There’s no way to determine which of the thousands of Bitcoin miners will get to the answer first. That gives us trustworthy transactions, without a trusted party.

So, what we’re seeing with Bitcoin is trust (16 to the 40th power trust) with no center and no boss. That is revolutionary; it negates centralization, the great god of the political ages.

People who come to understand Bitcoin also come to understand this.

The Genie Is Out of The Bottle

Given that Bitcoin is being talked about world-wide and is held by millions of individuals (I’m told that 46 million Americans own at least a little), this genie is pretty well out of its bottle. It has existed, under hostile conditions, for almost 14 years; everyone knows that it works, and works well. If by some dark miracle it was completely destroyed tomorrow, thousands of very smart and very motivated people would immediately begin rebuilding it. And by “immediately,” I mean, “after a few minutes.”

Bitcoiners, and crypto advocates in general, are intelligent, hard-working and self-directed. They are producing improvements and adaptations in a steady stream. This will not be stopped.

And so, “the revolution” is not someday; it is right here, right now. (A far more challenging thought!)

You can join it or you can fight it; you can dance or you can mourn. Or, I suppose, you could ignore it.

The choice is yours.

**

Paul Rosenberg

freemansperspective.com

9 thoughts on “Bitcoin Is Far More Than An Investment”

  1. You wrote about technical aspect of bitcoin but there is also a social one. To make bitcoin work people need to voluntarily trust each other so there is no job for “policeman”. I think that currently we don’t see official “War on Bitcoin” because the authorities think that they control bitcoin by controlling the internet.

    I was investing in gold for 10+ years and I have to say that bitcoin is a lot better. Gold is part of the system, bitcoin is freeman’s money.

  2. and that is why a new uncontrolled alternative internet is needed-hence the Qortal project- also a blockchain project that will have the potential-soon- of releasing not only Bitcoin but any project that is freedom minded and properly built for decentralization.

  3. I’m down in El Salvador this week and currently staying at Bitcoin Beach. The locals are glad to accept SATs and even better, it’s all over lightning. This is the first time I’ve spent Bitcoin IRL with a merchant. It’s amazing technology and unstoppable. It really is money for the people. The network is more secure and onboarding more users everyday. I got to talk with another developer in South Africa who’s created a lighting wallet that’s SMS based (you can text Bitcoin over lightning). It’s beautiful what it’s doing, and I don’t think most people I’ve spent with view it as a speculation for investment, I think many view Bitcoin as money. Regardless of what a politician has decreed.

  4. Since I’ve been asked: FTX had no serious relation to Bitcoin. As I’ve noted before, people shouldn’t be “buying a few cryptos.” Cryptos are the new penny stocks. Sure, there are a few with value, but people are buying them as a desperation move. I can understand why, but it’s still a mistake. Instead, you should get some Bitcoin, put it in a hardware wallet, and hide it away for several years. (Using some to buy and sell would also be an excellent idea.) Do not become a “trader.”

    As for the FTX family: They are political hacks and very dirty. This was the Bernie Madoff moment for crypto penny stocks. And yes, it involved money laundering into the Ukraine, into politicians’ pockets, funding bogus Covid research, and probably more. Dirty, nasty stuff.

  5. “[Bitcoin] has existed, under hostile conditions, for almost 14 years; everyone knows that it works, and works well.

    It certainly “works well” at consuming huge amounts of electricity. I don’t see any way this consumption can be sustained over the long haul, especially with competing cryptocurrencies shifting to much less wasteful verification procedures.

    “Bitcoin’s foundations are … even firmer than gold.”

    Do you not conceive of the slightest possibility that there could prove to be a bug which allows a clever hacker to create unlimited funds? I’m a programmer, and know that bugs can lurk for long periods before being hit. And is it possible that a currency which ceases to be accessible when the power goes out might have limited potential? As for gold, in what sense does it lack “firm foundations”? It has been tried and tested for way longer than 14 years. It can’t be created by hocus-pocus out of thin air. It is not destroyed when a hard drive crashes.

    New, exciting things are great when shopping for toys. If I were so rich I had money to burn, I might buy some crypto. Probably not Bitcoin, though.

    1. You are very wrong. You cannot send gold over internet, you have to pay commissions, storage fees, taxes etc. gold production and price is controlled by governments. Gold market is very corrupted. Try making simple test, take your ounce of gold and try to buy something with it, it will be very hard task. For the other hand, spending bitcoin will take me few minutes.

    2. BTW. I was investing in gold, gold stocks for the last 10+ years and to be honest it was the dumbest idea I have ever done. I lost a fortune doing it + my time. Want some gold? go and dig it yourself that’s my advice.

  6. Hi my dear friend Paul,

    I just wanted to say thank you again for all the help you have given me.

    Many years ago while searching, studying, trying to learn about people, politics, government, religion, finance, the stock market, life ….. I kept returning to one writer for understanding, truth, honesty, integrity….That writer was you!
    (For anyone searching for truth and wisdom I highly recommend reading all of Paul’s writings.)

    I really appreciated it when you graciously agreed to meet me in person,
    you changed my life, and I thank you with all my heart!

    My wife and I couldn’t agree with you more about Bitcoin.

    Many years ago, I believed.
    I wanted to believe.
    I was raised to believe,
    in the system.

    But after struggling to raise a family and run a small business I began to question many things, why did life seem so frustrating and difficult?
    Why couldn’t I afford health care?
    I was raised to trust the government, the politicians, the banking system, the education system, the legal system, the medical system, organized religion, the industrial food complex…. all of it, and I did, until they finally broke me and I started doing my own research-years of studying, reading everything I could about the aforementioned subjects including psychology and sociology, and anything I could to understand and learn the truth.

    Much of the system is corrupt.

    I have many examples, here is one.
    A few years ago I tried to purchase Bitcoin with three different credit cards, all declined. The banks issuing the cards were, Bank of America, Citi Bank, and Chase. When I called the banks to ask why my purchases had been declined, they said because I was buying Bitcoin.

    My wife and I decided to stop complaining about how dishonest things were and start doing something about it. As Paul has been teaching, “live a parallel life”.
    Our children were homeschooled, we grow and harvest much of our food, cut firewood to heat our home, bought Bitcoin, turned off the radio and cable tv, etc….

    A few years ago after studying Bitcoin for hundreds of hours and talking to knowledgeable people, we pulled all of our money out of the stock market and purchased Bitcoin. Purchasing small bits of Bitcoin, some as high as $67,000.00 and most if it above its current price. We will never sell, and will continue to purchase a little at a time.
    We believe Bitcoin offers hope.

    It’s time for good honest people to make a difference.

    We need trust in this world, we need a trustworthy store of value, Bitcoin can do this and much more!

    Your thankful friends in Alaska

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