Welcome to the Bitcoin Street Journal, Bitcoin
Market Update. In this episode, we bring you
the latest live market updates, technical analysis,
and breaking news on Bitcoin. If you want to
stay ahead of the game before the government
and central banks intervene, make sure to subscribe
to our podcast for daily updates on Bitcoin news
and trends. In today's episode, we'll cover the
misconceptions surrounding Bitcoin, how it solves
the problem of government control over money
supply, its decentralized and liquid nature,
its legitimacy and parallels to early Internet
investing, and the growing importance for financial
advisors to understand the potential risks and
benefits of Bitcoin. Bitcoin. The mere mention
of it could probably summon up worrisome thoughts
about it being a Ponzi scheme, a speculative
bubble, or even a tool for criminals. Many people,
including Warren Buffett and Jamie Dimon, have
been vocal in their criticisms of Bitcoin. These
big names are joined by others like Joe Biden,
Janet Yellen, Charlie Munger, Christine Lagarde
and Elizabeth Warren, who have all dismissed
Bitcoin as irrelevant to a well -diversified
financial portfolio. But what if all these detractors
don't really understand Bitcoin? Maybe they feel
threatened by the implications it carries for
their power, wealth or personal worldview. What
if those who support Bitcoin, instead of being
quick profit focused speculators, are actually
proponents of a game -changing network that aims
to make the global monetary system more fair
and transparent? The misconceptions surrounding
Bitcoin could very well be distorting the public's
perception of it, causing many to miss out on
a vast potential opportunity. It's worth noting
that, despite its well -known tendency towards
volatility, Bitcoin has been the most successful
asset of the past decade. as well as the highest
yielding asset during Q1 of 2023. Perhaps this
isn't the behavior of a scam or speculative bubble,
but rather of an emerging technology and a philosophical
approach to money that people are still coming
to grips with. Let's dive into the fascinating
world of Bitcoin, shall we? What exactly is Bitcoin's
purpose? Well, for starters, we can break it
down into two main objectives. First, to create
a digital version of cash. Second, and perhaps
more controversially, to break the government
monopoly on money. The Bitcoin white paper, published
back in October of 2008, starts things off by
saying, a purely peer -to -peer version of electronic
cash that would allow online payments to be sent
directly from one party to another without going
through a financial institution. It's becoming
increasingly clear that the world is moving towards
a purely digital financial system where there
won't be any physical cash -like bearer instruments.
This means that financial institutions, banks,
or even the government will have the power to
authorize all digital transactions. This doesn't
sit well with a lot of people, especially those
in regions that have a history of abusing civil
rights. Some countries in China have already
gone completely digital and even use access to
the monetary system as a way to exert social
control. On top of controlling the monetary system,
governments have also held an authoritative position
over the money supply. Unfortunately, their track
record overseeing it leaves a lot to be desired.
Historically speaking, Governments around the
world have a near perfect record of either mismanaging
or corrupting their money supply to the point
of failure. In the past, this typically occurred
by debasing coins of their precious metals. But
in modern times, it has been through uncontrolled
money printing. Today, countries like Argentina,
Lebanon and Turkey have printed themselves into
annual inflation rates of anywhere from 50 %
to a staggering 150 % and are hovering on the
brink of complete currency collapse. It's unlikely
that a fintech company tied to the existing financial
system or even a government would create a technology
that completely eliminates their authoritative
role over the monetary system and the money supply.
After the advent of the internet, several startups
in the private sector attempted to create peer
-to -peer digital cash. But they all failed.
They faced several obstacles along the way, but
at the core, their failure was primarily technological.
Producing a digital currency that is reliable,
impervious to corruption, and free of any outside
assistance is an extremely difficult endeavor.
Creating a system that allows two parties to
interact confidently without the need for a middleman
requires solving what's known as the Byzantine
general's problem. The computer science community
thought this riddle to be unsolvable for decades.
until Satoshi Nakamoto magically gave birth to
the solution with Bitcoin. Importantly, this
system created by Nakamoto only produces new
money through the effort of a computer network.
The rate of issuance of new money is known and
the terminal point of the money supply is defined
and unchangeable. In other words, with Bitcoin,
the money supply can never be manipulated and
inflation is impossible. When people think of
Bitcoin, there are often misconceptions and fears
that arise. However, these misconceptions often
stem from a lack of understanding or disinformation.
One of the biggest misconceptions is that Bitcoin
and Bitcoin are interchangeable terms, when in
reality there is a difference between them. Bitcoin
with an uppercase B refers to the entire ecosystem,
including miners, nodes, and the network protocol.
While Bitcoin with a lowercase B refers to the
unit of account representing the digital currency,
another misconception is that Bitcoin is not
very liquid. In fact, Bitcoin is always open
for business as the network and most exchanges
that interact with it operate 24 -7 -365. It's
incredibly easy to buy, sell or use Bitcoin at
any time from any location in the world. Some
also claim that Bitcoin cannot handle large volumes
of transactions. But this simply isn't true.
In 2022, Bitcoin actually processed more transaction
value than Visa and MasterCard combined. And
with efficiency like that, processing large transactions
of any size is a breeze. There are even examples
of over $1 billion of value being processed for
less than $1 .5 billion of fees, with transaction
finality occurring in less than 30 minutes. Finally,
A common fear is that the government will shut
down or regulate Bitcoin to death. However, Bitcoin
is the most decentralized network ever created.
It has no owner or central governing body and
is secured by millions of servers and nodes scattered
all over the globe. In fact, even a coordinated
attack by all the world's governments wouldn't
be enough to shut it down. While on ramps and
off ramps from Bitcoin to the establishment financial
system may be points of regulation. preventing
transactions from occurring within the Bitcoin
ecosystem is virtually impossible. Let's discuss
Bitcoin, a topic that is often the subject of
fierce debate. Some people argue that it is nothing
more than a Ponzi scheme that has artificially
inflated returns to the first investors. But
others insist that it solves real problems and
is backed by innovative technology. Which side
is right? Let's explore some of the key arguments.
Firstly, let's look at the claim that Bitcoin
is a Ponzi scheme. While Ponzi schemes involve
deceiving people into investing in a fake enterprise,
Bitcoin is a real business that has been operating
for over a decade. It provides a transparent,
verifiable system for processing transactions.
and it has been instrumental in solving a number
of real -world problems. Those who invested early
have undoubtedly made a profit, but this is true
of many other successful businesses like Amazon
or Google. Moreover, most Bitcoin holders are
not simply looking to turn a quick profit, but
are long -term savers who have no intention of
selling regardless of the price. Another criticism
of Bitcoin is its volatility. It is true that
its price has fluctuated widely in the past.
which can be worrying for potential investors.
However, it is worth noting that Bitcoin has
been the best performing asset of the past decade
and has always recovered from price drops to
establish new highs. Moreover, for people in
countries with unstable currencies, Bitcoin can
be seen as a safe haven and a way of protecting
their wealth. Finally, there are those who compare
Bitcoin to the internet itself. suggesting that
we are still in the early days of understanding
its full potential. The Internet took decades
to become the ubiquitous force it is today, and
many experts initially dismissed it as a passing
fad. The same could be true of Bitcoin, which
has only been around for 14 years. While there
will undoubtedly be winners and losers in the
Bitcoin market, those who buy early and hold
on are likely to be the biggest long -term winners.
So, is Bitcoin a Ponzi scheme? a risky investment,
or a potential game -changer? The answer, as
with so many complex issues, is not straightforward.
However, by considering the evidence and weighing
up the arguments, we can begin to see the potential
of Bitcoin and its impact on the future of finance.
Bitcoin is not a new concept anymore. It has
almost 100 % awareness in the mainstream public
globally and has reliably executed tens of trillions
of dollars worth of transactions. It's been around
for 14 years without a single hack to the blockchain
which is pretty impressive. Bitcoin has an extremely
limited supply. Only 21 million bitcoins will
ever exist and are gradually released into circulation.
The most significant thing to understand about
Bitcoin is that it functions similarly to the
internet, cell phones, and Facebook. They are
all massive networks. As these types of networks
grow, they follow exponential curves that appear
gradual initially but quickly ramp up. This is
known as Metcalfe's law, which states that a
network's power grows by the square of the number
of users. Bitcoin has been quietly growing for
years and now has 45 million addresses that hold
at least a fragment of a Bitcoin. Its potential
is enormous and poised to overtake the Internet
in the late 1990s. Crypto assets and Bitcoin
have come a long way. In the past, financial
advisors discouraged clients from investing in
crypto. But as people become more educated, the
risk is lower and the demand is high. The general
public is now becoming much more educated about
Bitcoin and its merits. Therefore, every financial
advisor should acquire an in -depth knowledge
of Bitcoin because they may soon be facing a
horde of passionate and informed investors demanding
advice and participation. It is also important
to note that, just like the internet, Bitcoin
is an alternative monetary system competing with
the establishment one. It may ultimately eat
the entire existing establishment monetary system
or co -exists with it, but its influence has
grown significantly. Every financial advisor
knows that a short position carries a tremendous
amount of risk. So a choice to not participate
in Bitcoin becomes a de facto short position.
In today's episode, we cleared up Bitcoin misconceptions,
discussed its potential for creating a new digital
version of cash and dispelled fears of regulation
or comparison with Ponzi schemes. Ultimately
concluding that financial advisors and informed
investors cannot afford to ignore the cryptocurrency's
exponential success in the current decade. Thanks
for listening to today's episode. I'll see you
guys at the next one and don't forget to subscribe.
Disclaimer. Price articles and markets updates
are intended for informational purposes only
and should not be considered as trading advice.
Neither the Bitcoin Street Journal nor the author
is responsible for any losses or gains as the
ultimate decision to conduct a trade is made
by the reader. This is not trading or investment
advice. This presentation is for education and
entertainment purposes only. Please do your own
research before purchasing or investing into
Bitcoin or any cryptocurrency. Always remember
that only those in possession of their own private
keys are in control of their own Bitcoin. If
you enjoy this type of content, please smash
the like and subscribe buttons below it. Helps
us to get more views and continues to spread
the word about Bitcoin. Thanks again.