Crypto CornerDublin People 08 Sep 2022
Welcome to Crypto Corner, my name is Dinny Collins from Bitcoin With Dinny.
Learning to invest gave me more time to enjoy life and less financial worries about the future.
I want the same for you.
My mission is to help as many people in Ireland to understand and to use Bitcoin and Crypto to give them more freedom in their lives.
I will be writing in the crypto corner every two weeks so be sure to follow the series and write in with any questions you have.
When you first enter the crypto space it is worth starting with Bitcoin and this is for good reason.
Many see the crypto space as a get rich quick opportunity and I’m here to tell you it is certainly not and this mindset is dangerous to your financial health.
For the last thirteen years anyone who invested into Bitcoin for four years or more has made money.
The same is not true for any other crypto asset.
But on to today’s topic..
Having a healthy degree of skepticism is a natural reaction to something we do not yet understand and in today’s article I would like to help explain some of your fears.
Is there such a thing as Digital value and digital money, is it real like?
To understand Bitcoin and Crypto you need to be able to answer ‘Yes’ to this question and understand your answer.
Digital Value is most definitely a real thing, take Facebook, Google, Instagram, YouTube etc these are all digital products or items and everyone is aware they are worth trillions of dollars/euros!
There is no physical form of any of these applications, they are solely digital icons that sit on our phones.
But Dinny Facebook, Google etc have offices and data centers in the physical world!
That is correct and Bitcoin has the very same, we call these miners and they have a physical footprint all around the world.
At an individual level it will not matter whether we can bridge this step or answer Yes to the question because the cycle of life rolls on regardless.
Humans have always moved towards technology since before the stone age!
Perhaps you have experience with your younger family asking for digital things for birthdays or Christmas rather than the physical things which were the norm when I was a child.
Kids nowadays want Skins for a certain computer game, FIFA credits or Roblox.
They choose these rather than a physical item! To them there is no inherent difference between physical or digital value.
Forgive the broad generalization but to the older generation’s being able to hold something physical in their hands is a good thing.
But the younger generations do not agree.
They actually see a physical version as an inconvenience if a digital version exists!
Last week I gave the example of digital maps, music and storage all being superior because we got rid of their physical form.
Digital money certainly already exists today, it is estimated that 85%+ of the world’s currencies are already digital meaning the majority of euros exist on screens in the banking system rather than actual physical notes stored in a vault.
And in China right now they are using a digital version of their Yuan and phasing out physical cash.
Digital money being used everywhere in the future is inevitable and predictable.
Here is an example of how the migration happens slowly:
There is a famous owner of a Gold mining company called Peter Shiff and he never has anything good to say about Bitcoin.
Which makes sense as Bitcoin may destroy his business in the future.
Peter obviously owns plenty of physical Gold which he stores in a vault etc.
However, he has a son called Spencer Shiff who is in his twenties.
Spencer owns zero Gold and uses Bitcoin instead.
He makes fun on twitter of his old man for being so backward and not seeing or using the money of the future.
Now inevitably Peter the father will pass away but what happens when Spencer inherits all the physical Gold bars his father hoards?
He sees these as an inconvenience to store my guess is he trades it for what he trusts and understands better which is the digital version – Bitcoin.
This migration from physical to digital in my opinion just happens naturally over time just as the horse and cart was replaced by the car, slowly because everyone feared it and didn’t like the change but then suddenly it became the norm!
Or it happens fast like in China or just like we transitioned from the Punt to the Euro, a law is changed and a new norm is created, so it’s worth getting ahead of the curve now.
The next fear you may face is Can You Trust Bitcoin if there is no physical form, could it just disappear?
Technically there are physical forms but we will not go there today and keep this simple.
The beauty of Bitcoin is that it is a trustless decentralized ledger system.
Ok let’s break that down.
What is a ledger?
A ledger is simply a record of transactions, your bank account is a ledger of what money you receive and what you purchase and the balance of what remains in your account.
The trustless part means it does not require human honesty and rather relies on math and code to ensure the ledger is kept honestly and accurately.
It is worth noting that the world’s largest banks which are centralized ledger systems pay hundreds of millions in fines every year for ‘discrepancies’ on their ledgers. Unfortunately us humans have a long history of being corruptible.
But by math and computer science bitcoins ledger system removes any need to trust a 3rd party and for any individual to act honestly.
Lastly the decentralized aspect of Bitcoin is where it differs from traditional finance which is centralized.
Bitcoin is not controlled or managed by any one individual company or organization, it is instead a system that is run by miners located all around the world. (A miner is someone who runs the bitcoin system, anyone can decide to become a bitcoin miner by using their computers to run the software – we will cover mining in future articles)
This decentralized nature makes Bitcoin impossible to stop, control or corrupt.
To actually attempt to ‘kill’ Bitcoin you would need to destroy every computer on the planet forever and turn off the internet forever which is quite unlikely and in such a scenario you would have much larger worries than your Bitcoin.
The actual strength of Bitcoin’s network is two hundred million times more powerful than the world’s second largest supercomputer!
And two million times more powerful than the world’s top five hundred computers combined!
So when an uninformed person comments ‘sure that will just get hacked because it’s digital’ it is worth noting that their traditional bank account where they trust the custody of their life savings does not have anywhere near the level of security that the Bitcoin Network provides.
If you missed last week’s beginner’s explanation of Bitcoin please visit my website to catch up and remember spending time on education saves you money on mistakes when it comes to using Bitcoin.
I have lots more to share in my next Crypto Corner and please write in with any questions you have and I will answer these also.
I look forward to taking you further down the Bitcoin rabbit hole on my next article
Connect with me on Facebook & Instagram for more information, I go live most days chatting crypto and check out my podcast on YouTube and Spotify, search Bitcoin With Dinny