Welcome to the merriest time of year, when loved ones may judge or praise you for your interest in Bitcoin (BTC) or simply ask, “What is that?”
Enlighten family and friends with solid arguments to convince your curious aunt or safeguard yourself from your brother-in-law, who just got his economics degree.
In this jolly exploration, we’ll delve into the world of digital currency enlightenment and discover why Bitcoin maximalists are singing carols about the first cryptocurrency.
Keep it light
When a family member opens a window to speak about Bitcoin at the Christmas dinner table, you should consider who your audience is. Remember, the goal is not to force someone into accepting Bitcoin but to provide accurate information and allow them to make an informed decision.
Tailoring your approach to the individual or group’s perspective and concerns can contribute to a more positive and constructive conversation.
As you may have experienced before, when asked about Bitcoin, you’ll commonly find yourself in a defensive position and bombarded with skepticism. Recognize the conditions and don’t erupt in passionate counterarguments; be patient and let the arguments do the talking.
Beforehand, prepare some analogies and real-world use cases and rehearse your argument, as it is easy to get lost.
Strong arguments for Bitcoin
Before you sit down at the Christmas dinner table, it may help to know some of the most convincing arguments for Bitcoin ahead of time:
Scarce supply: Bitcoin’s fixed supply of 21 million coins makes it a scarce digital asset comparable to precious metals like gold. The scarcity contributes to its value proposition.Decentralization: Bitcoin operates on a decentralized network, minimizing the risk of government interference and censorship. This characteristic enhances its resilience as a global, borderless currency.Security: Bitcoin’s proof-of-work consensus mechanism ensures a high level of security, making it resistant to attacks and fraud. Store of value: The narrative of Bitcoin as “digital gold” positions it as a reliable store of value, particularly in times of economic uncertainty. Network effect: Bitcoin has the largest and most established network in the cryptocurrency space. This status contributes to its liquidity, recognition and overall strength.Censorship resistance: Bitcoin transactions are censorship-resistant, meaning that individuals can transact without fear of their funds being frozen or confiscated. This aligns with the principles of financial freedom and privacy.Hodler culture: The orange pill narrative embraces the hodler mentality, encouraging individuals to hold onto their Bitcoin for the long term rather than engaging in short-term trading. This strategy aligns with the belief in Bitcoin’s future value appreciation.Halving events: Bitcoin undergoes halving events approximately every four years, reducing the rate of new coin creation. This scarcity mechanism is a bullish factor for Bitcoin’s long-term value.Innovation and development: Ongoing development and innovation by the Bitcoin community, such as the Lightning Network, demonstrate the adaptability and potential for improvement within the Bitcoin ecosystem.Global adoption: Bitcoin’s adoption is increasing internationally as a means of payment, store of value and investment. This trend is seen as a validation of Bitcoin’s growing importance in the financial landscape.Bitcoin: The next step in the evolution of money
Money has had many forms, with shells, salt and precious metals all serving as a medium of exchange. With the rise of empires, governments began issuing paper money, initially representing a claim on precious metals.
The world’s reserve currency, the United States dollar, was initially backed by gold reserves until the transition to fiat currency in 1971. U.S. President Richard Nixon permanently detached money from the gold standard, granting a new form of money in which central financial authorities could rapidly increase the money supply.
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Bitcoin proponents claim that this loss of a hard standard has resulted in runaway inflation, with politicians either unwilling or unable to address the core issue.
Amid the economic crisis of 2008, which saw unprecedented government bailouts for banks engaging in risky financial behavior, the pseudonymous Satoshi Nakamoto emerged. Like Santa on Christmas, this individual brought the gifts for the public in the form of a new evolution of money, Bitcoin.
Bitcoin: Currency vs. store of value
As stated in the white paper, Nakamoto designed Bitcoin to be a peer-to-peer electronic cash system. Since its inception, Bitcoin has been interpreted in many different ways. Its creator intends it to be a digital currency exclusively for the people.
However, Nakamoto’s vision for BTC has yet to be fully realized. The Bitcoin blockchain can become overloaded with traffic as its usage increases, delaying transaction times and spiking fees. While Bitcoin can transfer massive wealth across borders at a fraction of the cost of the traditional financial system, in some cases, like paying for a coffee with BTC, it can be expensive due to network costs and slow due to confirmation times. Fortunately, Bitcoin is an ever-evolving network with a strong community of developers.
There is fierce debate within the community, but the final objective of the Bitcoin developers is to offer a trustable, functional and decentralized currency that can be used for payments. Many solutions have been proposed, including layer-2 solutions.
The Lightning Network (LN) is a second-layer scaling solution for blockchain networks, enabling faster and cheaper transactions by creating off-chain payment channels. Lightning performs all the computational operations of daily transactions in an independent network, which is connected to the main Bitcoin blockchain. As all operational computing is done in many pockets of independent networks, the transactions won’t saturate the Bitcoin network. Once in a while, the LN would send the group of trades to the Bitcoin ledger in one transaction so they are registered. The LN can make BTC a software capable of managing daily payments, using the Bitcoin blockchain for all its positive properties without congesting the network.
There are many upsides to Bitcoin adoption. Anybody with a cheap smartphone and internet access, or even an SMS network, can use BTC.
Micheal Saylor, the former CEO of MicroStrategy and an ardent Bitcoin proponent, considers BTC the perfect modern tool to hedge against inflation created by government-issued fiat currencies. In one of the best orange pill displays on the Tucker Carlson Show, Saylor highlighted the elephant in the room. For Saylor, the modern middle-class cash dependency forces them to work harder to get paid in a weaker currency in a never-ending cycle.
The potential for Bitcoin as an asset is massive. Due to all its engineered properties, the markets could see Bitcoin as the new digital gold. As an ideal inflation hedge, Bitcoin may shift the markets gradually as institutional investors step in. It could absorb part of gold’s $12 trillion market cap, as well as the combined real estate and national currencies market caps of around $200 trillion.
A positive collateral effect from this shift in the markets mentioned by Saylor would be the demonetization of utility markets as the monetization of Bitcoin becomes popular. Some speculative markets would eventually return to their original purpose. Real estate wouldn’t be one of the first choices as a wealth preservation investment, and stocks would price in the actual value of a company instead of being investment vehicles to combat inflation or markets that absorb liquidity injections from money printing.
Bitcoin is digital property
In the future, Bitcoin may be a currency or the perfect store of value asset substituting gold. Around the globe, analysts are slowly but steadily grasping the deeper significance of Bitcoin: a digital property. And this may be the key feature.
Nobody has ever figured out how to transform money into digital property. Similar examples include the successful digitalization of photos, books, education, relationships and communications. These examples are the key to the success of Amazon, Facebook, Microsoft and Apple, which monetized the ability to digitize specific sectors.
Bitcoin may have hit the bull’s eye, monetizing capital property. Its functionalities provide individuals with a new form of property rights in the digital realm. Bitcoin offers individuals true ownership and control over their wealth without reliance on traditional financial institutions.
Society may have found something with integrity that gives people control over their lives in a world where there is a shared feeling life has gotten out of control. Santa, please pack some sats as presents.
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