Halfway through 2021, I decided that it was HIGH time I educate myself on all things cryptocurrency. I’m glad that I didn’t live completely under a rock. And that I should OBVIOUSLY start by learning all about Bitcoin (BTC). I feel like I have the basic first principle understandings however, there is still so much for me to learn.
So I’m organizing my learning here so I can easily share with others as I help orange pill them 🙂
As always, I’m a massive fan of definitions so let’s start with that. And finally, I’ll share the resources that I used or am using to educate myself.
What is Bitcoin?
When I decided to start learning about Bitcoin I started by searching for “the definition of bitcoin”. Here’s what’ popped up:
From there I went a little further and clicked on the top-ranked Bitcoin Definition by Investopedia.
They start by stating that BTC is a decentralized digital currency. It follows the ideas set out in the white paper by the mysterious Satoshi Nakamoto. Which I highly recommend reading after you have grasped the concept of BTC. They continue on to explain…
Bitcoin is known as a type of cryptocurrency because it uses cryptography to keep it secure. There are no physical bitcoins, only balances kept on a public ledger that everyone has transparent access to (although each record is encrypted). All Bitcoin transactions are verified by a massive amount of computing power via a process known as “mining.” Bitcoin is not issued or backed by any banks or governments, nor is an individual bitcoin valuable as a commodity.
Bitcoin Definition by Investopedia
Diving Further Into The Technology
Here is a great list of FAQs. I started asking around with friends who had already invested in cryptocurrency and received several resource suggestions. One of them is Anthony Pompliano’s podcast. While listening to several episodes I found out about his crypto course. The course aims to help 10,000 people find jobs in the crypto industry. I enrolled to learn more. In our very first workshop we dove into the concept of money to truly understand BTC.
We learned about the 3 functions of money. Which include store of value to a medium of exchange to unit of account. And the 6 properties of money which include scarcity, durability, acceptability, portability, divisibility and fungibility. I clearly didn’t paying attention to these concepts in economics during my University days. My next step will be to explain to a 5 year old the functions and properties of money as it relates to Bitcoin to see if I really understand it.
What is Blockchain Technology?
Blockchain technology isn’t actually included in the main definition of Bitcoin. However, Bitcoin doesn’t exist without the technology.
This was a really important concept for me to grasp to understand the security of Bitcoin. When you dive into learning how all the players in the decentralized network support the cryptocurrency the technology makes even more sense.
Why Would Someone Invest In Bitcoin?
So why would someone invest in bitcoin, since many investors deem it a risky investment? The risk in investing in Bitcoin is because the price of Bitcoin is quite volatile. The historical performance (compound annual growth rate) is actually higher than Amazon, Apple, Visa and Microsoft. Unfortunately because it’s measured in fiat currency equivalents we see volatility in price.
Investment or Long-Term
Many treat Bitcoin as short-term investment. Once you understand it’s potential for reliable, long-term store of value you’ll then come to understand why many investors using dollar-cost averaging to invest. Many will hold their assets long-term (otherwise known as hodling). Whether it’s an investment to imagine the future potential or to realize short-term gains there are several reasons why someone would invest in Bitcoin.
Resources
Learn about the fundamentals of bitcoin and crypto with Anthony Pompliano. Use code: FRIEND20 for 20% off and ensure you type my full name – ROBYN PINEAULT into the section when asked who referred you.