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Why Bitcoin?
Why Bitcoin?
Bitcoin was created by Satoshi Nakamoto and release after the 2008 Leman Shock in the "Bitcoin White Paper". It was a response to corrupt politicians mis-managing the nation's wealth. Bitcoin separates money and state allowing a trusted protocol to control the money rather than the fallacies of man. The bitcoin protocol is base off a lot of the technology developed by the US government and other computer scientists.
Bitcoin is Money
Bitcoin is Money
There has been a lot of different types of money through history; shells, gems, coins and even cigarettes. Bitcoin as a money is unique since it satisfies most of the properties of money. Bitcoin at its base is a digitally encrypted decentralized distributed accounting ledger. It is a huge step up from the accounting ledgers that are sold on Amazon. The decentralization with autonomy allows bitcoin to be the first true global currency. As of 2023, El Salvador and Center Africa Republic have both adopted bitcoin as legal tender.
Below are traits of how bitcoin stands as an unofficial global currency...
Durable: "Best Performing Asset Ever" - Forbes
Divisibile: 1 Bitcoin = 100,000,000 Satoshi!
Fungible: The digital accounting ledger allows bitcoin to be transacted with anything.
Portable: As long as your remember your seed phrase your bitcoin is with you. This means your wealth can be transported transparently across any border around the world.
Verifiable: Every transaction is verified by the bitcoin networks Byzantine consensus. This means that it will check the amount processed with 50 nodes (accounting ledgers) and will only process the transaction if there is a general consensus that the funds are available.
Scare: Only 21 million bitcoins will be mined. Currently around 19 million bitcoin have already been mined. blockchain.com
Track Record: Bitcoin is still early on adoption and acceptance. This money isn't forced upon the population so the adoption has been slow but its following the same trajectory as the internet. You can read more about the spread of bitcoin at phemex.com.
Bitcoin is a Store of Value (SoV)
Bitcoin is a Store of Value (SoV)
The bitcoin revolution is empowering the individual by not devaluing their wealth, it is digital gold (without the physical weight of gold). With fiat we have income tax, sales tax, inheritance tax, printing of money (hidden tax) to the point that our money becomes worthless.
Bitcoin is Green Energy
Bitcoin is Green Energy
Despite the fear, uncertainty and doubt that media and political puppets like Greenpeace preach; bitcoin is GREEN! It inspires energy innovation and is one of the leaders of processing trapped energy.
Bitcoin is Autonomous
Bitcoin is Autonomous
All bitcoin transactions are made public on every node so how is bitcoin autonomous? Despite transactions being public they are all encrypted with SHA256 which even with a super computer would take millions of years to crack. Also bitcoin users can generate new addresses for every transaction so specific addresses also can't be followed or traced. Recently exchanges are wanting users to register their hardwallets and softwallets before they can transfer bitcoin to them. This compromises the autonomy of your accounts and I suggest purchasing your bitcoin through different means.
How to buy bitcoin?
How to buy bitcoin?
Before you buy bitcoin you should setup either a hard wallet (Bitcoin Network) or a soft wallet (Lightning Network). A wallet allows you to hold and spend your own bitcoin rather than an exchange, bank or external party access to your funds. Many exchanges have been hacked or have over leveraged their accounts leading to lose of users savings which has led to the expression, "Not your keys, not your bitcoin". It is necessary that you hold the keys (seed phrase) for your wallets or else it is a scam. A seed phrase is a 12~24 secert word phrase that will give you access to your account. Never type or save your seed phrase on the computer, they should only be typed on the wallet. For safe keeping it is best to have your seed phrase encoded and stored in three separate locations.
Hard wallet is similar to a savings account and can be setup on a device like a USB. Popular hard wallets are Trezor and ColdCard.
Soft wallet is similar to a checking account and can be setup on your cellphone for making easy purchases. Popular soft wallets are Muun and Samourai.
Once you have your wallet you can buy bitcoin in a couple of different ways...
Buy from a trusted friend or meet-up group. (Fiat)→(Friend)→(Bitcoin)→(Wallet)
Buy from an exchange. (Fiat)→(Exchange)→(Bitcoin)→(Wallet)
Register with an exchange: Banking information and personal information
Send money to exchange through bank account or convenience store deposit
Buy bitcoin on the exchange
Send bitcoin to private hard or soft wallet.
WARNING: Leaving your bitcoin on the exchange may lead to loss of all your investment. Unless you are a day-trader or don't mind the gains & losses tax burden I would recommend using bitcoin as a savings and checking account. Also please note that exchanges like bitFlyer have passed many KYC regulations making autonomy very difficult, often they won't allow bitcoin to be taken off their exchange without personal information being disclosed.
Buy from a bitcoin ATM. These are very rare in Japan and requires identification and tax reporting.
Mining bitcoin. This is probably the best approach but technical ability, cost of entry and energy consumption must be weighed into your decision.
Bitcoin Dictionary
Bitcoin Dictionary
There is a lot of special terminology when talking about bitcoin. Below is a short dictionary to explain the meaning of some of these terms.
Address: Usually shown in a barcode that allows payment to your bitcoin account.
Bitcoin Network: The main blockchain for bitcoin. Every node has the entire history of every transaction.
Bitcoin White Papers: The document that details and describes the bitcoin protocol.
Byzantine Consensus: A process that uses the majority to determine the truth.
Exchange: An online marketplace where bitcoin or cryptocurrencies can be purchased.
FUD: Fear, Uncertainty, Doubt:
Fungibile: How easily interchangeable a currency is across all assets and currencies.
Hard Wallet: USB like device for holding and accessing your bitcoin on the Bitcoin Network.
Keys: Same as Seed Phrase
KYC: Know Your Customer is use with FUD concerning financing terrorism, but is more important for governments to track and tax. Best to buy non-KYC bitcoin.
Lightning Network: Allows for faster and cheaper transactions by batching groups of transactions together before sending to the Bitcoin Network.
Mining: Confirms the transactions and generates new bitcoin base of supply & demand algorithms.
Node: Small computer with about 2 terabytes for storing all bitcoin transactions. Used for the confirmation of accounts and network rules. Anyone can run a node which decentralizes and distributes the security of bitcoin.
Seed Phrase: A 12~24 random list of words that acts as a password to your bitcoin account.
Soft Wallet: An app that allows holding and accessing your bitcoin on the Lightning Network.
Everyone wants to be wealthy.
Nobody wants to run a tight budget, work a full-time job, learn about bitcoin, stop buying non-essentials and save a portion of every paycheck.
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