It turns out that there is not actually a very clear definition for what bitcoin is.
That may be why you, I, or so many people just don’t get why people are so damn excited about it.
Every crypto enthusiast you ask for an explanation gives you a different one.
It’s like gold – but better!
It can replace the crony monetarism of the Federal Reserve and other central banks!
It’s got limited supply so there can’t be inflation!
You can send it across borders so easily!
It’s completely open and immutable, so everyone can see who’s buying and selling what, and how much of it!
It cuts out middlemen, banks, and intermediaries leading to lower fees!
It’s a store of value, and a transactional currency!
But what actually is bitcoin?It’s pretty hard to say, and again, the more people you ask, the more definitions you get.
Is it a currency? Is it money? Is it an idea, or a technology? Is it a store of value like gold, or does its value derive from usage, like a social network? Is it a risk asset, or a hedge?
Is it for buying coffees or cars, coinage or cocaine?
To me, the key debate stems from one idea. Does the current global monetary system have a problem, or not?
The answer to that very question should guide you towards an initial interest in bitcoin, which then leads on to all the other questions I describe.
Do you think that having our monetary supply controlled, managed and manipulated by a bunch of “unelected bureaucrats” is a good idea?
Tell you what, a Fexit or BoExit could be on the cards with that kind of rhetoric…
Can a small group of people really say for sure what the “right” price of money is? And how much there should be?
Do they understand completely all the consequences and knock-on effects of what they are doing, as well as its limitations?
Are they the firemen, or the arsonist?
If you think the world would be better when governments and central bankers could not, for love nor money, debase the currency and erode the purchasing power of your savings, then there are alternatives.
Let me know what you think by emailing me here. Have the central banks saved us from collapse, or laid out the kindling for the next bonfire?
They lie in two main camps – analogue (a gold standard), and digital (cryptos).
A return to the gold standard is one possibility. Many think it politically impossible, though one of its advocates (Judy Shelton) looks set to get a nomination to the board of the Federal Reserve.
Could bitcoin provide an alternative?
Its supply is limited – with only 21 million coins set to be produced (at a dwindling rate between now and 2040).
That counteracts thousands of years of monetary debasement by the kings, queens, emperors, dictators, and governments of history.
And at a time when we are seeing the global “race to the bottom” in currency terms, with everyone printing money at unprecedented rates, objecting to the consequences of that (inflation) does lead you to a reserve currency of sorts – be it gold or a digital version like bitcoin.
And perhaps with a limited supply and technological capabilities, bitcoin could supplant gold despite its much shorter history.
We’re still no closer to saying what it is though.
And there are also a whole host of alternatives, from other cryptos to private ones, or government mandated ones.
It’s hard for them to compete though.
Because bitcoin has a unique and irreplicable advantage.
And it’s quite an ordinary one.
It was first.
The more I look into it and talk to different people about it, this is emerging as the most powerful thing in bitcoin’s favour.
It’s allowed the creator to vanish into the shadows, making it a truly decentralised, uncontrolled entity.
Not like pounds, dollars, or other cryptos which have “owners” or “controllers” in the form of their central banks or creators, who can change the rules with a flick of their wand.
It also created a virtuous cycle. Because it was first, it gained the first early adopters and in a virtuous cycle, this has drawn more people to it.
The more people join the network by buying or transacting bitcoin, the more significant it becomes.
Bitcoin, like a telecom or a social network, benefits from more people using it.
Will that be enough?
There’s a lot to unpack in this space, and it’s definitely something I want to investigate more over the coming months.
Editor, UK Uncensored
PS Sam Volkering is our in-house crypto expert, and I’ll definitely be speaking to him about all of these questions. If you want to learn more about crypto, check out his work by clicking this link.