Its time to learn about Bitcoin, if you are worried about your Kid’s Future ( or your future )

Photo by Edward Howell on Unsplash

Why should you learn Bitcoin ?

The short answer is “Bitcoin is a Digital Monetary asset with absolute scarcity which is perfect solution to endless inflation we suffer today” in other words “Bitcoin is the Noah’s ark that will save us from the monetary hyper-inflation flood that will be coming soon”

For this reason, many believe Bitcoin Offers of the one of the greatest wealth generation opportunities in the human history

The great banking mystery

Before you get into Bitcoin , i want you solve this simple banking problem.

You need to run full speed just to stand still

Is Real-estate really an Investment ?

Even though your house price keeps going up every year, the reality is you haven’t made any real return if you remove the effect of money printing.

95% of real-estate Investors feel its a great investment coz they have never lost money ( thanks to inflation which no one understands ) and have made it as a life goal to own as many properties as possible by taking on insane debt from banks ( which are super happy to lend you and earn those juicy commissions )

Not to mention, real-estate is a physical asset and hence also acts a status-symbol.

Why Not Stocks ?

Stocks are fundametally complicated compared to simple inflation hedges like gold, Bitcoin ( and to some extent real-estate ). There are too many moving parts when you invest in a company.

How Inflation helps Governments when you pick Stocks??

As mentioned before, you cant stay married to a stock for 20 years, you need to keep flipping one stock to other, which means every time you sell , you need to pay capital gains tax on them.

we need a good long-term Inflation hedge desperately !

Inflation is the biggest problem in the world today and is getting worse every year as govts keep printing record amounts of money just to pump GDP numbers up.

The curse on Gold

Gold has been thoroughly corrupted by Govts of the world, gold faces all type of issues in the modern world and is currently in its death bed.

Bitcoin Fixes Gold’s Flaws !

Bitcoin at its core very similar to Gold with all the good properties of gold which is scarcity, divisibility , durability, fungibility but bitcoin brings three additional features which gold lacked ( which led to its debasement , demonetization and ultimate deceased state ) which are verifiability , transportability and is confiscation-proof.

Even in today’s so called ‘civilised’ world, governments across the world sieze gold at a drop of hat, don’t believe me ? try moving 10 kgs of ‘gold’ across any border today.

The Super Power of Encryption

Modern Encryption ( like sha-256 which is used in Bitcoin ) etc is nothing short of a super power in your hands.

with its innovate design Bitcoin avoids the curse of ‘Centralization’.

By avoiding the curse of ‘centralization’ Bitcoin offers a simple yet unconfisctable and incorruptible investment. Now by holding a store-of-value asset like Bitcoin, you are making 10–20% at the minimum compared to investing in Govt bonds, for this reason The market size for a strong store-of-value type investment is predicted at mind-blowing $100–150 Trillion which represents a 100–150x upside potential for Bitcoin.

Bitcoin obviates the need for any trusted third-party and empowers an individual with absolute freedom over their money, which is probably biggest real world super-power one could have in our life times.

Bitcoin final supply is fixed at 21 million coins , with each bitcoin divided into 100 million satoshis. The current supply is about 19 million coins with just 1% new bitcoin being minted every year which is halved every 4 years until new supply becomes zero at 2140.

What is the real need of Bitcoin , when we have fiat currencies like Dollar, Rupee etc ?

First things first, Bitcoin is not a currency ( not yet), its not legal tender in most countries except for the south american country el salvador. So for the rest of us , Bitcoin should be considered an Asset. Bitcoin is ‘Digital Gold / Property’.

Bitcoin is a ponzi scheme as it doesn’t have any underlying cash flows

NewsFlash: All money/ Gold is a Ponzi scheme by this definition coz no Money by itself has underlying cash flows.

Bitcoin is too volatile for it to be a store-of-value

Bitcoin was invented just 11 years back in 2009 which started at price of few cents and went all the way to $65,000 in May 2021. As bitcoin is still being learned and understood by the wider public the price experiences wide swings ( pumps and dumps ) however this volatility has been coming down the market-cap of bitcoin keeps growing. As bitcoin matures into a larger asset of market-cap like say $20–50 trillion ( compared to its $1 trillion value today ) the volatility will surely come down and will match to that or more mature assets like gold.

Bitcoin can be hacked from my wallet and there is no recovery

This part is partially true , Bitcoin can be stolen from your wallet if you DO NOT take adequate protection i.e if you store your private keys on a online wallet or an app on phone , however if you keep in a hardware wallet like ledger / trezor, any digital theft is impossible.

Only Bitcoin will prove to be the the true long term ‘store-of-value’, every thing else will die catching up to Bitcoin.

Bitcoin network can be attacked and destroyed

Since bitcoin is a decentralized and no one party is really in control a lot of people find it very difficult believe and trust the robustness of the network. Many people wonder how ‘a decentralised network can protect itself from all type of possible of attacks both from hackers and nation states’ ( countries like north Korea or even USA in future :P )

Bitcoin will be banned by governments sooner or later

Bitcoin is a highly decentralised network with no single point of failure or a company behind it, so there is no single party which govts can arrest and bring it down.

Every one needs to adapt bitcoin for its to be valuable

Bitcoin is currently valued at about $60,000 ( with a market-cap of about $1 trillion ) , so its already very valuable for those who invested in the last 10 years. Bitcoin’s value is not dependent on the majority of population accepting it. Bitcoin is valuable even if few million people buy it and hold it ( currently about 120 million people worldwide hold bitcoin ) , however the value of bitcoin goes higher as more and more people adopt.

Bitcoin will be replaced by another cryptocurrency as its not scalable on main layer

Bitcoin network ( devs / nodes / miners ) has chosen to focus on security and decentralisation instead of top layer scalability. Blockchains which focus on scalability on layer 1 have to necessarily compromise on decentralisation, Bitcoin is the only network whose nodes can be hosted on a simple laptop which ensures decentralisation.

Ethereum is better than bitcoin as it supports smart contracts

First thing first bitcoin does offer smart contracts however they are pretty hard to code as the coding style has been kept simple so its designed to eliminate any attack vectors, Ethereum has compromised on decentralisation and security to offer Turing complete smart contracts which cannot be relied for super strong sound money.

Bitcoin model can be changed at will by developers destroying the stability it provides

Bitcoin is probably the only network in the blockchain world which is totally resistant to fundamental architecture level changes.

Bitcoin consumes a lot of energy compared to other coins

Bitcoin aims to provide a financial life line to billions of world’s who live in regimes with inflation eroding their lifes’ wealth.

Bitcoin can be hacked by quantum computers

Bitcoin is currently secured by sha-256 encryption algorithm the same encryption that is used by governments, military and banks, breaking Bitcoin blockchain and stealing bitcoin from its wallets is practically impossible( it would take all the world’s computers together few million years of work to guess a private key)

Bitcoin sounds like a wonderful oppurtunity, why are the rich not jumping to Bitcoin en-masse

The weird irony is the people at the very top benefit massively from the currency fiat system as they can borrow cheaply (at the cost of long-term pension holders ), however thats not the full story. Facebook CEO doesn’t want any lime-light on Bitcoin, he wants the full lime-light only on Facebook coz if investors realise Bitcoin investment is far less risky than invest in FAANG stocks, huge corrections will happen. however, The rich ( not super rich) will eventually discover the power of Bitcoin when they see Bitcoin going up and becoming the best investment of next decade as well.

Closing thoughts

Bitcoin is undoubtedly the biggest revolution of 21st century as it attempts to rewire the global financial system.

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