There are two kinds of people in the world: Bitcoiners and “no-coiners.”
No-coiners don’t ‘get bitcoin’ because to understand it you have to own it and use it. It’s even better to mine it to make the mental jump.
For me it was mining as my old 1060 notebook could mine and so I switched on Nicehash software and it told me I was going to make $1.50 a day in bitcoin for just being me and my old notebook and being kind enough to run the software. Not that I was anybody who gave any private info. They didn’t want me to register, they didn’t want proof of my identity, my e-mail or my mobile. They didn’t want to listen to my microphone like Microsoft and a few others with their ‘fluffy’ clouds praying to prey on my ‘selfish ledger’ of data, they just wanted my hash address.
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In that moment I went from very skeptical to a total convert.
My computer was at last paying me for nothing. “I was making money at home with my computer” for real just like the scammers had promised for the 25 years I had been online. The moment had arrived when I was going to be paid for merely existing and having a computer. The thermodynamics of money and economics had reversed, and money was going to flow to me from the world rather than flow from me. Existence was now an asset not a liability.
It’s a bitcoiner epiphany.
But without such a moment these five questions come to mind to “no-coiners” and here are the answers.
1. Bitcoin is backed by nothing, how can it have value?
National currencies are backed by nothing but a promise, which is why currencies like the dollar, the pound, not to mention currencies like the lira, peseta and reichsmark have lost 95% or more of their value in the last 100 years. The backing is from trust, which is generally high in ‘fiat’ currencies and is also high among users of cryptocurrencies. Crypto has trust strengths and weaknesses but ultimately bitcoin has proven to be as good and in many cases better money than ‘fiat’ when it comes to transactions and ultimately money is backed by its ability to transact.
2. Isn’t cryptocurrency just a way for criminals and terrorists to transact?
It will be a long, long time before cryptocurrency even registers alongside the transaction volumes of cash. Ninety percent of dollar bills test positive for cocaine so it’s kind of moot that the occasional bandit will use cryptocurrency to do their dirty business. Most crpytocurrencies, and likely all, are actually more traceable than cash transactions and many honest people will say that is a negative for bitcoin, so beyond the media hype, this is no more an issue than music pirates and pornographers using the internet to peddle their nefarious ways. This is how new technology works, the initial cohort of adopters are the opportunists and not all of them are nice people. Then comes the mainstream.
3. Isn’t Bitcoin a bubble?
Yes it was. Yes it will be. Dotcom companies created a bubble that burst and now they rule the world. Bubbles have a bad rap because they leave a lot of greedy people crying but they also leave huge industries behind. Holland produces $2 billion a year of tulips these days, so even the mother of all financial bubbles left an industry behind that is still going 300 years later.
4. Bitcoin is a ponzi
No it isn’t. A ponzi scheme is a financial card trick where people are promised returns, sometimes like Madoff’s fund, not even massive ones. These returns are paid out from new money coming into the fund from new investors, not from monies invested. The pension schemes of the West are ponzi schemes, perhaps yours included, and funnily enough they are melting away before your eyes. (As an aside, who is going to be brought to justice over that?) Bitcoin is merely a currency you buy, hold or transact with. It has no inherent return beyond an unknowable potential for capital gain based on demand for it to transact or use as a store of value.
5. Bitcoin is just a fad.
Bitcoin is just an application of the new(ish) revolutionary technology broadly called ‘blockchain.’ Blockchain is ‘triple entry bookkeeping.’ Clearly to run most businesses you need bookkeeping and people got on just fine with that for a few thousand years. A huge breakthrough in accounting was double entry bookkeeping, which was a key foundation to the explosion of the late medieval economy. ‘Triple entry bookkeeping’ is the next step forward for business and economics; it takes accounting, resource allocation and value to a higher plane.
The ancient world = clay tablets and single entry bookkeeping
The modern world = double entry bookkeeping
The future = triple entry bookkeeping
Blockchain is therefore a huge step for economics and cryptocurrency is the fuel for it.
So rather than ‘baby brain’ pate, bitcoin and blockchain are the future of money and while double entry bookkeeping types might not like the idea of it getting served up, triple entry bookkeeping is the wave of the future. I admit it, saying “blockchain and bitcoin is the wave of the future” sounds so much better, but perhaps if the semantics can be reframed, the no-coiners might have their epiphany.
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Author: Clem Chambers