There’s More to Bitcoin & Cryptocurrency Than You’re Seeing In the Media

Intro to Bitcoin & Cryptocurrency and the Humanitarian Potential of Them

Disclaimer:?The purpose of this article is education; it is not intended as financial advice.?Please seek the counsel of a trained financial professional before making any investment.

Introduction and Overview

Bitcoin and other cryptocurrencies are decentralized currencies that allow almost instantaneous payments to anyone in the world with no reversals or charge-backs, unlike credit, debit cards, or Paypal.?Here are the key concepts:?the owner does not hold a physical coin; instead, the owner holds a digital asset that represents a claim to an entry on a secure ledger.??

A simplified depiction of data fields in Bitcoin blockchain.

The reason Bitcoin is such a big deal is that it’s the first successful implementation of a distributed cryptocurrency based on cryptographic proof.?It’s secure because of its unique cryptographic design, which is transparent and subject to cross-checking by a large number of computers from all over the world.?The digital ledger, where all the information is stored, is called a “blockchain,” which is a particular type of database.??

Another key concept of Bitcoin is that it’s extremely difficult for governments and traditional banks to control it, and it is an alternative to fiat money, which is the currency of traditional banks & governments, not backed by anything like gold.?The U.S. dollar and the British pound are examples of fiat money.?Remember that when you’re holding a dollar bill, you’re holding a piece of paper which implies that the U.S. government says, “We’ve got your back on this, you can trust us, this piece of paper has value.”??

Most of the U.S. dollars that you have in the bank are simply numbers secured on a bank’s ledger, usually stored digitally, whereby the bank’s employees and board members assume that they can trust their own computer networks & programs, and you trust them. Source: Andreas Antonopoulos, Introduction to Bitcoin: What Is Bitcoin and Why Does It Matter? (2016)?

Another key concept of Bitcoin is that there will only ever be 21 million Bitcoins issued, which means it cannot be inflated in the same way just generating fiat money occurs.?This serves as deflationary “hard” money, which gives it a similar quality to gold in that we can’t just make new gold like we can fiat money. (Learn more here https://coingeek.com/why-bitcoins-supply-is-limited/ ).?

How to Engage With Cryptocurrency

The next question you may be asking is, “How do I buy Bitcoin or any cryptocurrency?”?First, you need to know you can buy a fraction of a Cryptocurrency. When you see that one Bitcoin is $39K that does not mean you would need to buy 1 Bitcoin. The smallest unit of a bitcoin, equivalent to 100 millionth of a bitcoin is called a satoshi. You could make an analogy of this to the penny before we had digital fiat currency existed. To start in owing Cryptocurrency you need a hardware or a software cryptocurrency wallet (BRD is a software wallet where you hold your private keys https://brd.com/ ).?These wallets can only accept a finite number of different types of coins.?The software wallet is generally an app.?After you install your software or hardware wallet, the wallet will give you 12 or 24 words that you need to write down; it is critical that you keep this list of 12 or 24 words in a secure and fireproof location, because if you lose your list of words, you lose your cryptocurrency, and, anyone who has that list of words has access to all the cryptocurrency you’ve added to that wallet.?Never post a photo of your list or put the list online in any form or you risk losing your currency.??Your 12 or 24 words are connected to something called your private Keys inside the wallet and hence the quote:

“Not Your Keys, Not Your Coins”

- Andreas Antonopoulos

You also have the option of a hardware wallet, which you can find online. Hardware wallets provide a higher level of security because they usually have some software running on your computer that hooks into a hardware device that uses very primitive computing power, which makes it more secure than the software we use on a regular basis today.?A tip: only buy hardware wallets from the manufacturer and make sure the software wallet is reputable.

Below is an example of what the receiving address may look like (but not blurred out).

?The next step in the process is to get your “receiving address,” or a Bitcoin address for Bitcoin.?You’ll use that address for receiving Bitcoin from one of four options:

1. From someone who has Bitcoin to sell,?
2. On an exchange that offers it, (Coinbase.com is a good intro.)??
3. As payment for work you do in the real world for someone who pays you in Bitcoin or cryptocurrency.
4. From a Bitcoin ATM (Bitcoin ATM’s in the U.S. will often charge a 20% fee per transaction).??To find local Cryptocurrency ATM check: https://coinatmradar.com/bitcoin-atm-near-me/ , https://bitcoindepot.com/ - and https://bitstop.co/ ?.

Examples of software wallets?

• BRD - https://brd.com/ ?
• Coinbase Wallet https://wallet.coinbase.com/

Examples of hardware wallets

• Trezor One & Model T - https://trezor.io/start/ ?
• Ledger Nano S?- https://shop.ledger.com/products/ledger-nano-s

Here’s an example. Let's imagine that Judy Doe is sending me $50 in cryptocurrency; she wants to send it to me in Ethereum, a type of cryptocurrency.?I go into my digital wallet on Ethereum and get my receiving address, which is usually a stream of finite letters & numbers that’s almost impossible to write down accurately (so I copy it), along with a barcode.?I can give either the stream of digits or the barcode to Judy Doe and ask her to send my payment to that address.?Once she sends my payment to that address, it goes through the system, gets verified, and shows up in my wallet with clear confirmation, all without going through a traditional bank and in just a few minutes on any day of the week, any day of the year.?Judy Doe will not be able to call her credit card company to dispute or take back her payment to me because it is unchangeable.

Humanitarian Implications

Some people, especially from the middle or upper levels of income or we, may be unaware that there are in fact many people in the U.S. and around the world who don’t have enough money to participate in a traditional banking system.?In this context, these people are referred to as “the unbanked” or “the underbanked.”?Often, however, they do have access to a cell phone and/or smartphone -- this is their ticket into cryptocurrency.?Their phone can give them the power to control their own money, which may help to close the gap for them and their families.

• “More than half of unbanked households [in the U.S.] cited not having enough money to keep in an account, according to a 2017 survey by the FDIC.” https://www.cnbc.com/2019/03/08/25percent-of-us-households-are-either-unbanked-or-underbanked.html
• In October 2014 “about 4 in 10 Americans under age 35 remain either unbanked or underbanked.”?https://www.americanprogress.org/issues/economy/reports/2014/10/30/99967/millions-of-americans-are-outside-the-financial-system/
• In 2019, six percent of adults in 2019 did not have a checking, savings, or money market account.??https://www.federalreserve.gov/publications/2020-economic-well-being-of-us-households-in-2019-banking-and-credit.htm
• “The events of recent months relating to COVID-19 and the economic instability that has accompanied it have brought increased attention to the digital divide. In an economy that runs on the assumption that individuals have full access to traditional banking, living without that access has a number of costs. It’s important to understand these costs and how living without full access to the banking system can prevent the unbanked and underbanked from building wealth.” https://www.forbes.com/advisor/banking/costs-of-being-unbanked-or-underbanked/
• The developing world is leapfrogging from having no power or telephones to solar power and cell phones and from having no banks to banking without a bank. Andreas Antonopoulos, Introduction to Bitcoin:?What Is Bitcoin and Why Does It Matter? (2016) https://youtu.be/l1si5ZWLgy0
• People in volatile countries without a secure currency such as Venezuela and Zimbabwe now have a safer way to use money and do business. https://youtu.be/lq9u3XRELqM

Following is a heartwarming documentary called: "Banking On Africa - The Bitcoin Revolution (full documentary) - True Story"

The concept that people can now have currency freedom from their government is both a revolutionary idea and a core change in humanity.?On the flip side, and this may be frightening,?for the first time in history, we have a currency that could be used by software or possibly AI.

Conclusion

“News” today seems to have a strong interest in getting attention and providing opinions over informative content, often only showing one side. Social media is good at swinging to extremes, quickly passing the center with its own crowd bias. As I have been studying the world of Cryptocurrency I find it has a depth and brilliance that does not fit well in a sound bite. The creators of Bitcoin saw a problem in centralized currency in the world and applied different levels of understanding about human nature, cryptography, programming, and the monetary system on the planet to create an ingenious solution.?Maybe a new form of distributed news could emerge, inspired by Bitcoin, with a commitment to reporting what actually occurred without providing any commentary on that system, allowing the public to select the level of depth of news they want like traversing levels of abstraction.??

What is most fascinating about Bitcoin is that it introduces to the world an alternative to the single-point control of currency, an example of which is a country's federal banking system.?That doesn’t mean it’s the perfect answer, at least not now.?The best way to think about cryptocurrency at this point in its timeline is to compare it to the first automobiles; we don’t yet have the local roads or fuel stations to support its use on the main street, so to the horse & buggy owner this automobile thing does not seem as useful as a good horse & buggy.?Don’t underestimate the potential of this new technology?Andreas Antonopoulos, Introduction to Bitcoin:?What Is Bitcoin and Why Does It Matter? (2016)?https://youtu.be/l1si5ZWLgy0

Andreas Antonopoulos, one of the top experts on Bitcoin, is the author of several books on the topic.?In The Internet of Money, Volume I (2016), he explains Bitcoin so that any layperson can understand it, and there are now three volumes available.?The first three chapters of his Mastering Bitcoin, 2nd Edition (2018)?are accessible to any interested reader who has only a little technical knowledge, while the remaining chapters speak mainly to techies.??

I recommend that all professionals gain at least some working knowledge of Bitcoin, cryptocurrency, and blockchain because either your clients or people in your clients’ networks are already involved, and you’re going to wish you could keep up with the conversation.?I challenge you to speak to five sharp, younger people you know and discover how many of them are either using Bitcoin or know someone who does.?If you’ve written it off, thinking it’s bad or evil, or not worth the effort to learn about, then you’re not serving your clients as well as you think you are. The brilliance of it is how it all functions together in a transparent distributed system independent of a centralized system.

Two book references:

• The Internet of Money by Andreas M. Antonopoulos https://www.amazon.com/gp/product/B01L9WM0H8/ (for the absolute beginner, good foundation info).
• Mastering Bitcoin: Programming the Open Blockchain by Andreas M. Antonopoulos??https://www.amazon.com/Mastering-Bitcoin-Program ming-Open-Blockchain/dp/1491954388/ - (the 1st three chapters for deeper understanding, then more technical but still useful to skim).

See my article on the energy side of Bitcoin & cryptocurrency https://www.dhirubhai.net/pulse/bitcoin-energy-environment-what-news-telling-you-martin-brossman/ .?If you find yourself interested in learning more, we have training for small businesses, professionals, and professional organizations on understanding cryptocurrency, Bitcoin, Non-fungible tokens, and Blockchain.?Contact Colleen at [email protected] to find out availability for speaking, training, and consulting on the topic.?Link to our training for professionals associations and groups titled "Insights?Into Bitcoin/Cryptocurrencies, Blockchain, and Non-Fungible Tokens (NFTs) in user-friendly terms" https://martinbrossmanspeaks.com/bitcoin-cryptocurrencies-blockchain-nft-for-professionals/ ????

Other Articles and Videos by Martin Brossman related to Bitcoin, Cryptocurrency, and Blockchain:?

• What is a Non-Fungible Token (NFT)? https://www.dhirubhai.net/pulse/what-non-fungible-token-nft-martin-brossman/
• Bitcoin, Energy and the Environment https://www.dhirubhai.net/pulse/bitcoin-energy-environment-what-news-telling-you-martin-brossman/
• There’s More to Bitcoin & Cryptocurrency Than You’re Seeing In the Media https://www.dhirubhai.net/pulse/theres-more-bitcoin-cryptocurrency-than-youre-seeing-media-brossman/
• Blockchain & Bitcoin is a paradigm shift in the world - with David Amerland & Martin Brossman https://youtu.be/YoNGJvI-_lI
• Transferring 20 US dollars of Bitcoin from Raleigh NC to Japan live! https://youtu.be/7991jYeOv7A
• A CPA working with clients involved in Cryptocurrency and Bitcoin https://youtu.be/mm000Qonlp8
• Keep your Cryptocurrency Mnemonic Phrase Safe https://youtu.be/HbYybEQhkC8
• About our Professional Training on Understanding Bitcoin, Cryptocurrency, Blockchain, and NFT https://youtu.be/u47tNIc8HwM

Special thanks to Dana Gower, Noah Boswell with whom I collaborated to develop training on this subject, and?Andreas Antonopoulos for all his relentless work providing outstanding education and information to the community. Thanks to Mary Alice Askew for her research.?Photo credit https://www.flickr.com/photos/mtwashington/5062665244 and https://commons.wikimedia.org/wiki/File:Iraqi_refugee_children,_Damascus,_Syria.jpg https://commons.wikimedia.org/wiki/File:Bitcoin_Block_Data.png

We are scheduling our training for professionals - "Insights Into Bitcoin/Cryptocurrencies, Blockchain, and Non-Fungible Tokens (NFTs) in user-friendly terms" https://martinbrossmanspeaks.com/bitcoin-cryptocurrencies-blockchain-nft-for-professionals/

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