Sun Tzu famously stated, "The greatest victory is that which requires no battle." This wisdom underscores the significance of strategic thinking, especially in a world brimming with uncertainty. True power is not just about winning conflicts. It involves creating scenarios that make opposition irrelevant. As we welcome 2024, the need to navigate through financial uncertainties has become more critical than ever. For those seeking to preserve their purchasing power without a struggle, comprehending Bitcoin and its potential to safeguard financial liberty is paramount. However, before exploring Bitcoin, understanding money itself is essential. This article aims to provide a comprehensive exploration of money, Bitcoin, and why Bitcoin is a peaceful revolution against the insidious advance of totalitarian surveillance within the financial domain. It aspires to arm the reader with the insights necessary to navigate the ever-evolving digital landscape with acumen and confidence.

What is Money?

Money is a fascinating and complex tool that has evolved over centuries. Money serves three primary functions in society: medium of exchange, unit of account, and store of value.

1. Medium of Exchange: Money is widely accepted in exchange for goods and services. Rather than bartering with goods that the seller might not want, money provides a convenient intermediary.

2. Unit of Account: Money provides a standardized metric for valuing goods and services. Much like a tape measure is essential for precise construction, money serves as the essential tool for measuring economic value. This standardization simplifies trade and valuation, making it easier for individuals and businesses to compare and assess worth.

3. Store of Value: Money can be saved and retrieved in the future to make purchases. Ideally, money should hold its value over time ensuring certainty for the holder in an uncertain world.

However, not all forms of money are created equal. Throughout history various items have been used as money including shells, salt, precious metals, and, more recently, government-issued currencies known as fiat. The transition to fiat money was a significant shift from commodities like gold, which had intrinsic value. Now we live in a system where value is derived mainly from government regulation and trust in the issuing authority.

For approximately 53 years, the world has undergone an experiment with a fiat standard, ever since the departure from the gold standard in 1971. This shift has fundamentally altered the nature of money, eroding its function as a store of value and transforming it into a system of control. Consider the experience of the Canadian Truckers and those who donated to their cause which resulted in their bank accounts being frozen for peacefully protesting against mandates they deemed tyrannical. Such instances starkly illustrate the power wielded by those who control fiat currencies. Understanding what constitutes money and its properties is crucial in grasping the significance of Bitcoin in today's evolving financial landscape.

What is Bitcoin?

Bitcoin is a decentralized digital currency facilitating peer-to-peer transactions without the need for a central authority. It leverages blockchain technology for secure and transparent record keeping. Envision blockchain as a publicly accessible ledger, an open database that anyone with a computer can verify and use. While it's commonly misconceived as anonymous, Bitcoin operates on a pseudonymous basis. Users engage through public addresses, intricate strings of letters and numbers, providing a veil over their true identities until such addresses are linked to them. Nevertheless, all transaction histories are indelibly etched onto the blockchain, offering significant traceability and transparency. If you want a visual mempool.space offers a great website for viewing the blockchain and all the transactions inside each block.

The design of Bitcoin fundamentally challenges and diverges from traditional monetary policies and governmental controls. At the core of Bitcoin's revolutionary features are a permissionless system for sending value and a fixed supply limit of 21 million coins, ensuring supply inelasticity. This contrasts with gold; despite its scarcity, rising prices prompt miners to increase gold production and inflate supply. Bitcoin's absolute cap means no additional bitcoins can ever be created, making it a deflationary asset resistant to the inflation that erodes the value of conventional fiat currencies over time. By capping supply while demand increases with adoption, Bitcoin is designed to become harder over time, not easier, to produce. Bitcoin is money engineered to resist centralized manipulation and preserve purchasing power over time.

How Are New Bitcoin Created?

Imagine the Bitcoin network as a digital ledger that records every transaction made with bitcoin. About every ten minutes, a new block (block of transactions) is added to this ledger through a process known as mining. Miners, who are individuals or companies with powerful computers, compete to add these new blocks. They do this by solving complex mathematical puzzles, which requires considerable computing power and energy.

In the process of mining, when a miner successfully deciphers the complex puzzle, they earn the privilege to append the most recent transactions into a new block. This effort and resource expenditure are rewarded with freshly minted bitcoins, commonly referred to as the block reward. This mechanism not only ensures the verification and secure recording of all Bitcoin transactions on the blockchain—a permanent and transparent ledger—but also continuously distributes new bitcoins into circulation. Approximately every four years, or after every 120,000 blocks, the block reward is halved, diminishing the influx of new bitcoins and enforcing the currency's deflationary aspect. This graphic illustrates the diminishing block reward a miner receives for each block over successive epochs. Until the year 2140, miners will continue to receive new bitcoins in the coinbase transaction of each block. Post-2140, miners will be compensated solely through transaction fees, marking the end of new bitcoin creation.

This sequence of adding blocks one after the other creates a chain — hence the term "blockchain." Each block confirms and secures the transactions before it, making it nearly impossible to alter past records. For a deeper dive into the technical details this video offers a great explanation of how the software behind Bitcoin actually works.

Why Digital Things Exponentially Outcompete Analog Ones

In an age where convenience and speed are paramount, digital technology has rapidly outpaced its analog counterparts, transforming the way we communicate, share, and remember. While there's an undeniable charm to the visceral experience of receiving a hand-written letter or thumbing through old photographs, these analog experiences have become rarities in a world that prioritizes efficiency and accessibility.

The personal touch of a letter offers a sensory and emotional experience that email cannot replicate. Similarly, the physicality of an old photo, with its unique texture and the memories it evokes when held, provides a sense of nostalgia that digital images can't quite capture. Despite this, the overwhelming majority of our communications and memories now reside in digital form. This is not a mere trend but a testament to the exponential advantages digital technology provides. Digital things like email and smartphone photos allow instant global interaction, erasing distances and weaving a more connected world. The efficiency, speed, and convenience the digital world offers make it an irresistible choice for both personal and professional contexts.

Moreover, the digital format's capacity for storage and replication is unparalleled. Consider photographs: while an old photo is a singular object, a digital image can be duplicated endlessly with no loss of quality. This means our memories can be shared and preserved across multiple platforms and devices, safeguarding them against the decay and loss to which physical objects are susceptible. Additionally, digital technology continually evolves, offering ever more sophisticated ways to capture, enhance, and share our experiences.

One intrinsic challenge with digital assets is their inherent lack of scarcity; a digital file, like a jpeg photo, can be copied endlessly without degradation. This abundance made the concept of creating digital gold quite a difficult one. That was until an anonymous person named Satoshi Nakamoto introduced the Bitcoin white paper. Bitcoin radically transformed the digital realm by introducing the concept of scarcity to cyberspace. Contrary to an email, which remains with both the sender and the recipient upon sending, Bitcoin operates differently. Once a transaction is made, the bitcoin exclusively belongs to the recipient.

There is something to be said about the sensory allure of holding gold in your hand but the dominance of digital technology is irrefutable. Its efficiency, capacity for preservation, and global connectivity outpace analog counterparts. As humanity continues to innovate, we will keep integrating digital technology into every facet of our lives and monetary systems. There is value in honoring the cherished qualities of lindy analog experiences. Yet, there is little doubt that the future is unequivocally digital. Bitcoin is at the forefront, harmoniously blending the revered scarcity of traditional assets like gold with the infinite possibilities of the digital era. This blend not only honors the past but paves the way for a more connected and efficient future where a small group of people do not get to control money for the other 8 billion people on Earth.

5 Tips For Investing In General

1. Educate Yourself: Before investing, understand what Bitcoin is, how it works, and its potential risks and benefits.

2. Set Your Objectives: Are you looking for short-term gains, or do you believe in Bitcoin's long-term value? Your strategy should reflect your goals.

3. Secure a Wallet: Choose a Bitcoin wallet to store your bitcoins. There are various types, including hardware, mobile, and desktop wallets. If you keep bitcoin on an exchange you don’t hold bitcoin, you hold an IOU for bitcoin. It’s the same as having gold in your possession or a piece of a paper saying you own gold. For large amounts of bitcoin it is wise to get a hardware wallet because that allows you to secure private keys on a device that is not connected to the internet meaning it can’t be hacked.

4. Start Small: If you're hesitant, there's no harm in starting small. Even a minor investment can help you learn and grow your understanding. Oftentimes once money is on the line, even if only a small amount, people tend to learn more.

5. Practice Safe Investing: Don't invest money you can't afford to lose. Ask yourself if this asset goes down 50% in a day will I be okay, will I dump what I hold, will I buy more?

5 Resources For Going Down The Bitcoin Rabbit Hole

1. The Bitcoin Standard By Saifedean Ammous This book is a cult classic amongst Bitcoiners and responsible for orange pilling many.

2. The “What Is Money?” Show Robert Breedlove does a fantastic job trying to answer this question with his podcast and as noted on his website this is the most important question for finding truth in the world.

3. Bitcoin Magazine This platform offers both digital articles and analog magazines filled with articles covering a wide range of topics in the Bitcoin space, articles range from highly technical to extremely esoteric and everything in between.

4. Bitcoin Fundamentals This show features a military veteran/value investor turned Bitcoiner who does a great job helping break down complex topics into easy to understand discussions.

5. Swan A financial services platform for learning about Bitcoin, purchasing bitcoin for a trust, withdrawing bitcoin into self-custody for free, and host of Pacific Bitcoin, a conference out in LA every year bringing together some of the brightest minds in the space.

Removing Financial Gatekeepers Peacefully

Bitcoin's decentralized nature offers a form of financial freedom that's not reliant on traditional banking systems or geopolitical influences. It empowers you to own and control your money without intermediaries. However, with great power comes great responsibility. You'll need to understand the security aspects, like keeping your private keys safe and learning to deal with market volatility as measured in fiat. Zooming out is a big way to help with the latter challenge. A broader perspective can be invaluable in this context. The chart below showcases both the hash rate (gold line) and the USD price of one bitcoin (blue line). The hash rate, indicative of the energy invested in securing the network, offers a tangible measure of Bitcoin's underlying strength and resilience, providing a clearer picture of its long-term trajectory.

As you embark on your Bitcoin journey, remember it's not just about investment; it's about joining a movement that advocates for a more open, transparent, and fair financial system. There is no denying most people come to Bitcoin for the number go up technology, but the ones that stay do so because they see Bitcoin as a solution to the problems created by broken money. Take your time, learn continuously, and connect with the community. You can tell someone has truly taken the orange pill when they stop thinking of buying bitcoin as an investment and view it as their savings account. Bitcoin offers humanity a peaceful revolution where money is backed by mathematics and open source software instead of debt and violence. Bitcoin is simply better money.