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Explore the principles behind Bitcoin

Bitcoin is an attempt to innovate money. And like all innovations, it challenges the status quo. Therefore, to truly understand Bitcoin, you must be willing to think outside the box and question the long-held assumptions and beliefs you’ve been conditioned to accept. Bitcoin challenges the very system we’re used to.

In mainstream economics we learn that

  • Prices naturally rise over time and that inflation is necessary
  • Buying a home requires going into debt
  • The money in our bank account is truly ours
  • A central bank is essential

We tend to accept these statements as self-evident — almost as laws of nature. But reality says something else. Some of the most prosperous periods in history have seen falling prices, and savings — not debt — was once the most common way to buy a house. Too often we see bankruns, governments freezing money, entire currencies collapsing due to hyperinflation, and central banks printing money to finance wars that the ordinary citizen neither wants nor chooses, but ends up paying for through a debased currency.

Bitcoin is proposed as a solution to these kinds of problems: a system where individuals regain financial sovereignty and freedom. It is money built by the people, for the people—a monetary system designed to reward delayed gratification rather than those closest to the money printer

Understanding Bitcoin requires courage not to be guided by dogma, which is to accept something as undoubtedly true just because an authority determines it. The Bitcoin concept is a peaceful revolution that does not try to force anyone. It offers an alternative — and people choose for themselves if they see the value in it.

Sound Money

Bitcoin is a “proposed solution” because Bitcoin is not alone. Throughout history, people in the market have naturally searched for what is called “Sound Money”, which is money that is not corrupted by anyone and holds its value.

The word historically refers to money that is reliable and trustworthy, but it also relates to the fact that empires and kingdoms used to devalue their gold currencies by reducing the gold content of coins to fund their own activities, and people could often tell which currency was not debased because pure coins would ring and make a clear “sound” when dropped.

Gold fulfilled this role in the physical world for centuries—from the first gold coins in Lydia around 600 BC—until 1971, when the U.S. dollar, the world’s reserve currency, was taken off the gold standard entirely.

Today, various alternatives exist, including other cryptocurrencies attempting to solve similar problems. All of these ideas point toward one concept: Sound Money.

The Big Picture

In the big picture, it’s not about what money “wins”. Money is a tool of coordination, and Sound Money makes coordination more stable and fair, so that we can better achieve what economics is all about: improving our conditions and building a future we want to be in. The key also lies in the fact that money was the technology that allowed humans to think long-term, because it allowed us to preserve value over time, so that it could be possible to delay consumption in order to get better things in the future. This is especially what the Bitcoin concept is all about, allowing people to strive for the long term.

Bitcoin is not about anarchy or removing all forms of authority. It is about decentralizing control, not eliminating structure.

This is a pattern we’ve seen throughout history:

  • The Printing Press decentralized information that was once monopolized by the state, the church, and the nobility.
  • The Internet decentralized communication, allowing anyone to share information globally.
  • The Seperation Of Powers that modern democratic governments use, is to decentralize authority and prevent any single entity from having total control.

 

This idea is at the very core of why Bitcoin was created. As the creator of Bitcoin, Satoshi Nakamoto, wrote in 2009:

“The root problem with conventional currency is all the trust that’s required to make it work. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Bitcoin vs Crypto

Lastly, it is important to distinguish between Bitcoin and the broader crypto space.

There are millions of Cryptocurrencies out there, but extremely few actually serve a useful purpose. You can paint a rock gold, but that doesn’t make it gold. The same applies to most cryptocurrencies.

Separating signal from noise is therefore essential.

Most crypto’s don’t aim to be money neither. Many projects explore different ideas, such as Web3 — decentralization of platforms, applications, ownership, and identity — as well as smart contract platforms.

There are also a large number of crypto projects designed primarily to benefit their creators rather than solve meaningful problems.

This website focuses on one thing only: Crypto As Money.

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