How to discuss bitcoin and not look like a fool

This holiday season will be difficult to do without discussing the bitcoins. Since the cost of bitcoins flirts with $ 20,000, and institutional investors are starting to invest big money in bitcoin futures, this issue has become a hot topic for discussion over coffee, business lunches, festive tables, etc.

Brief tips will help you not to look silly when discussing Bitcoin. Regardless of whether you think that bitcoin mania is a tulpomania or an anarchist revolution, you will question your credibility in the crypto-entrepreneurial community if you repeat the wrong mainstream ideas about bitcoin as a parrot. These tips will help you gain clarity and reinforce an understanding of this potentially revolutionary technology.

Perhaps you are a cryptocurrency expert - in this case, you probably don’t need this article. Send this article to a friend who can use it! (Note: I use Bitcoin to describe the network and protocol, and Bitcoin (s) to describe cryptocurrency units.)

If you are not joking or trolling, try not to say the following:

• "Bitcoin CEO". Bitcoin is not controlled and is not issued by any central organization. Thus, there is neither a company, nor a general director, nor employees who could control the production, transmission, storage and use of all bitcoins. So, you shouldn’t recommend your friends to “contact Bitcoin support service” if they lose access to their private keys. If they do not keep their bitcoins in a wallet or on a stock exchange like Coinbase or Kraken, they are fully responsible for the security of their keys. Losing access to private keys essentially results in the loss of bitcoins themselves.

  
  

• "No one knows the number of existing bitcoins!" Or "There is an unlimited number of bitcoins!". The number of bitcoins is transparent and the inflation rate is consistently repeated. Moreover, the total number of bitcoins is limited: there will be only 21 million bitcoins in the world.

  
  

• "No one understands how bitcoin works." The official publication explains how bitcoin works: https://bitcoin.org/bitcoin.pdf . The document describes in detail the cryptographic and economic fundamentals that allow Bitcoin to function as money decentralized in P2P. In addition, the software underlying the protocol and network is completely open and tested: https://bitcoincore.org/ .

  
  

• "There is no transparency in bitcoin." All bitcoin transactions are recorded on the blockchain and are publicly accessible to all who are connected to the Internet. Transaction records are permanent — that is, they cannot be changed. When people complain that bitcoin is opaque, they want to say that the identification information of the parties to the transaction is hidden behind pseudonyms: the parties have a computer-generated address and need to make an effort to find out the identification data of those who are behind this address. However, as soon as personal identifiers are detected and bound to specific addresses, you will be able to track all transactions from the very beginning of the network. Despite the fact that there are methods to avoid this kind of tracing for confidentiality-related problems, the fact remains: the blockchain actually facilitates transparency if transactions are present.

  
  

• "Bitcoin is not legal because it is not supported by any government!" This is the whole point - the main value of Bitcoins comes from the fact that it is not supported by the government or any other central apparatus. The network relies on an extensive and decentralized group of people around the world to place and verify transaction records to prevent users from spending the same bitcoin twice.

  
  

• "Bitcoin is a scam." This statement does not make much sense, if not to give appropriate explanations. First, who is cheating? There is no central unit for the production and sale of bitcoins. There is no Bitcoin, which pays for sensationalist ads on Google, to mislead you when buying Bitcoin. The history and technology of Bitcoin are transparent and accessible to everyone - you can judge for yourself the merits of technology and economics. Secondly, in what context is Bitcoin a scam? Bitcoin is actually used in many legal transactions, including the purchase of real estate and cross-border payments. In hyperinflationary countries, such as Venezuela and Zimbabwe, bitcoins are considered as an alternative reserve of money that can protect citizens from the rapid devaluation of the currency.

  
  

• "I can not buy bitcoin, because it is too expensive!". You do not have to buy a bitcoin! You can buy a share. Satoshi is the smallest bitcoin unit you can buy. One hundred satoshi currently costs only about 1.5 cents in US dollars. You can quickly and easily purchase bitcoin through Coinbase.

  
  
• "Bitcoin is unsafe - all software can be hacked!" Bitcoin exchanges and wallets (that is, the services in which users store, send, receive, and sell bitcoin) can be cracked. Individual users may lose access to their private keys due to the negligence and fraud associated with phishing. These problems can be avoided with certain precautions. However, the basic Bitcoin protocol is unlikely to be “hacked”. Bitcoin is designed in such a way that an attacker will need enormous computational power to change the transaction history. Neither side has enough computing power to carry out a decent attack on the network. Even if one side tries to collude with other parties to attack the network, economic interests will prevail; so, each side will invest more in its bitcoins (further strengthening the network) instead of engaging in attacks.

I hope that this article has increased your personal rating and intellectual capabilities, or at least has helped you not to lose them. Share the article with a friend who is not able to sort out this topic!

The article is a translation of Lindsay X. Lin's “ How to Discuss Bitcoin Without Sounding Like an Idiot ” material.