The other day I was climbing the stairs to my gym. Four flights just to get to a place where I can work out. Talk about proof of work!
I was wearing my Bitcoiner sweatshirt and the gentleman who was on his way down called it out. We wound up having a conversation with a flight of stairs between us. At first, I thought he was going to discount Bitcoin because he didn’t understand it, but I found him to be someone who was genuinely interested in learning more about it but was confused by all the misinformation in the public domain about Bitcoin. Ignorance about Bitcoin in conjunction with price volatility and recent scandals can be very scary. I told him if you’re looking for short term gains then Bitcoin is probably not for you. But if you project out to 5 years or more, it’s not ok to not understand Bitcoin and the impact it will have.
Consider a couple of metaphors: imagine having a livelihood that relied on the horse and buggy in 1905, and not understanding the impact of the combustion engine. My personal experience was being presented with the Internet in the Fall of 1994. I was working at a publishing company at the time. The “C” suite of the company I worked for killed our internet division in 1996 because our Web product threatened the existing business. That began a long slow decline into obscurity taking a $500M company to zero in a few short years.
I was also selling pagers for a brief time in 1998. Sometimes you just have to take a job, even if it’s selling something on its way to being obsolete. It was not until 1999, when I became director of NetTV that I was able to be on the cutting edge of broadband internet and computing. That job was no accident. I took the time to understand the internet and its impact on how we communicate, how we connect with each other, and how it facilitates content delivery. (This was basically 1994–1995 timing). I prepared myself and began positioning my career and my personal life around how to embrace the internet and the great disruption that was slowly destroying the legacy systems of content, commerce, and communications. These things take time.
Interestingly enough, I did not do the same thing when I first became aware of Bitcoin in 2010. That was a billion dollar mistake. (I will tell the story if we meet for cocktails.) I finally took the deep dive many years later after sitting on the fence not doing the homework to look into it deeply. I also spent years lending too much weight to the advice I was getting from those whose livelihood was tied to traditional banking and fiat money. Bitcoin represented a threat to their existing status quo so obviously this anti-Bitcoin advice was biased.
In reality, I am still not what you would call an expert in Bitcoin, but I am in a place where I understand it enough that it has already changed my life for the better, and I’m confident when I say things will only get better, they will Just like Howard Jones Song.
As we head into this fall the price might go up, it might go down, I don’t know of course. We may get a Bitcoin friendly administration or a hostile one. And guess what? It really doesn’t matter. Just like it doesn’t matter if your politics are left, right, or center, Bitcoin doesn’t care, it’s just going to continue doing what it’s doing. Understand this: it doesn’t matter if you like Bitcoin or not, it’s only going to get stronger and become more widely adopted. Once you begin to understand Bitcoin you slowly wake up to this reality.
To really begin to understand Bitcoin, it’s going to take 100 hours or more spread out over time. So pace yourself, take breaks, enjoy life but keep your eye on the prize and take the time to learn.
A couple of key points to study in order to understand Bitcoin
- Proof of Work (my gym reference will make sense) v. Proof of Stake
- Finite Supply (Only 21 million ever)
- Decentralized Network (Nodes and Miners and how they secure the network)
- Also, understand our existing system of fractional reserve banking and fiat debt as it relates to inflation
- Understand the difference between the main chain and layer 2 solutions such as the Lightning Network (Hint: Lightning delivers more capability like broadband but there are tradeoffs.)
The good news is that you don’t need to be an expert in order to understand the benefits. We don’t need to fully understand how the internet works in order to benefit from it. As you begin to understand Bitcoin you unlock the benefits now and 5 years from now. It’s definitely a marathon and not a sprint.
I really don’t know how long it’s going to take for Bitcoin to change commerce and communications forever like the internet did. The Bitcoin ETFs being approved and brought to market are simply the latest signpost along a long road. For some reference, the first commercially successful internal combustion engine was in 1860 it was not until 1908 that Ford’s Model T began rolling off assembly lines. Bitcoin’s first block was in 2009. My guess is it will be faster than the combustion engine but slower than the internet.
It’s good to start learning about Bitcoin now.
All the best,
Jim
PS I’ll get you started with this fun fact: A new block is mined every 10 minutes, and the network releases a fixed amount of Bitcoin and distributes it to miners. This release of Bitcoin is called a block reward. Before the Bitcoin halving in April 2024, the block reward was 6.25 per block. May 7, 2024 https://cointelegraph.com/explained/how-long-does-it-take-to-mine-1-bitcoin
