Bitcoin Is Easy.

Bitcoin is as easy as 1, 2, 3.

But first, let's take a moment to forget about it and listen to a story. A story about a computer code and a digital protocol created using computer code, rules, and people's cooperation.

1. Imagine a protocol or network designed in such a way that independent nodes (miners) are incentivized to run a ledger of transactions for a limited number of digital tokens (21 million) and come to a consensus on the new state of the ledger after each new batch of transactions (block) were made. This protocol has no central governance, can be accessed globally, and is resistant to censorship due to its distributed design.

2. Now, with a secured, decentralized, resilient, censorship-resistant, globally accessible, and easy-to-use protocol with a limited amount of digital property (tokens), what can we do with it?

Let's consider using it as a unit of store of value and observe what happens. It may turn out to be useless, and nobody might use it in that way, or if people start using it this way, it could serve as such.

Gold, as a natural ledger, has served this role for thousands of years simply because people decided and agreed to do so, and because gold possessed properties around which such an agreement was possible and viable.

3. If and when enough people recognize this potential in a protocol and a digital token, and use it accordingly, it begins to serve that role because (1) it is designed to do so, similar to a Gold and (2) enough people use it for that purpose, so it gets adoption and network effect (more people use it more valuable each unit is).

But is there a purpose it serves? Maybe there's just no need for it.

People exchange their time and energy for others' time and energy and want to move it in space and preserve excesses in time. And they have invented all sorts of things to do it.

The most basic one is currency. However, there's a problem with that—it has been designed in such a way that those in power always abuse it for their own interests.

So people through times resort to using various protocols such as rocks and stones (houses), gold, diamonds, art, financial instruments, etc., to satisfy that need by collectively agree around some properties of those rocks.

The need is evidently there, without a doubt.

This is Bitcoin in a nutshell. If and when we agree that it's a useful tool that satisfies that need, all 8 billion people in the world will be able to use it accordingly.

That's it. It is that easy indeed and the experiment is ongoing...

Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, a research report or a recommendation. Any decision to invest or take any other action with respect to the investment instruments discussed in this commentary may involve risks not discussed herein and such decisions should not be based solely on the information contained in this document.

Disclosure: SeQuant Capital manages BTC on behalf of its clients. Members of our team have exposure to Bitcoin and other digital assets. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any digital asset. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.