Well, here we are. I guess I’m just another one of those crypto-bloggers now.
Before you read on, please note that I am not an expert. If anything, I’m probably an idiot. And for legal reasons, none of this should be taken as financial advice.
I’ve been in crypto for over 3 years now and in that time, I’ve made plenty of mistakes and I’ve learnt some things along the way too, so I thought it might be handy to write some of this stuff down in case I forget. I’ve been considering doing something like this for a while and it finally seems like the right time to start this up, as the market slowly bleeds out and we all get some time to reflect.
In due time, I plan on writing about the metaverse (whatever that is), DeFi and probably some stuff on critical thinking when making trading decisions. If that sounds like your cup of tea, then follow me (or whatever it is you do on Medium, I’m new here).
Now that I’ve waffled on long enough, if you’re still reading, let’s get started. To understand crypto we should probably start with Bitcoin. So, let’s crack on…
Bitcoin
“WTF is a Bitcoin anyway?” I hear you ask.
Well, I could talk about store-of-value, cryptography, layer-1 chains and loads of other stuff. But this is a beginners guide, so let’s keep it simple.
Bitcoin is digital gold.
That’s it. Seriously. For now, that’s all you need to know.
“Why do we need digital gold? We already have gold, you fools!”
Have you ever wondered what money is? When a country is in debt, why can’t they just print more money? If you want to know more in detail about what money even is, let me know in the comments and I’ll write an article attempting to explain it. I’m trying to keep this article simple though, so all you need to know is that the cash in your pocket used to be represented by real physical gold. It no longer is. The cash in your pocket now is more of a ‘government promise’ and everyone just has to mutually agree that this cash is worth something. It’s nothing more than a belief system. As governments print more money, there’s more of it in circulation and as a result, the value of the cash in your pocket is worth less and less.
“What’s this got to do with Bitcoin, get to the point!?”
Bitcoin(BTC) has a fixed total supply. There will never be any more than 21,000,000. This means that if I own 1 Bitcoin, in a years time that will be 1 Bitcoin. In 10 years time it will be 1 Bitcoin. And guess what, in 100 years time… well, I’ll be dead. But that’s not the point. My 1 Bitcoin will forever be 1 Bitcoin. No inflation, no politics, no drama.
Let’s talk about the dollar (no, I’m not American… but considering recent news, it feels more fitting). If we apply the same logic as above and I own $1 and hold onto it. In one year the dollar in my hand still looks like a dollar, it still feels like a dollar and it still smells like a dollar. So, surely it’s worth the same right?
WRONG! Generally, as time passes and inflation does its thing, the $1 in my pocket has less and less spending power and everything around me gets priced higher. So yes, the dollar in my hand still looks, feels and smells like a dollar. But over time it’s worth less and less.
“Why can’t I just buy gold then?”
To be honest, you can. Buying and holding physical gold is still much smarter than leaving your money rotting away in the bank. But what happens when you want to spend that gold? Gold can’t easily be used as a currency in todays world. Imagine trying to pay your bills by shipping boxes of gold to your energy provider… nightmare.
Bitcoin on the other hand, can be stored and sent easily.
“Ok I get it now, but Bitcoin is too expensive for me”
Maybe this was just me, but prior to starting my crypto journey I always thought that I’d have to buy an entire Bitcoin and that the price was too rich for my blood. So for a long time I ruled myself out (told you I was an idiot). This is not true. If you only have a spare dollar to your name, you can still buy a fraction of a bitcoin (called a Satoshi, think of it as the cent is to the dollar).
I’ve probably waffled on long enough here, if you’ve somehow made it to the end without falling asleep then hopefully this has helped to scratch that curiosity-itch you had about Bitcoin (if you want to learn more about Bitcoin specifically, then I highly recommend The Bitcoin Standard).
Additionally, if for some odd reason you enjoyed reading my ramblings about Bitcoin, well I have good news for you. This barely scratches the surface of the weird and wonderful world of crypto. If you want to do some extra homework (loser) then have a look into Ethereum.
Thanks for reading,
woofie
