Bitcoin – You’ve heard of Buyer Beware, but what about Reader Beware?
Bitcoin has become the hot topic of conversation with media coverage, casual conversations, social media posts, videos and blog posts popping up everywhere. I believe it’s great to see conversations arising because they ultimately lead to education.
Yet only this weekend I saw a post asking whether people get paid commission for selling bitcoin (quick answer is no, except for professional brokers, but there are scams to be wary of), and the comments in the thread were misinformed, half truths or misleading. Another article, that you would have presumed would be reliable because of its source, was woefully opinionated without supporting facts for many of the authors accusations.
Inevitably in such a young market there will be an enormous amount of misinformation and extreme bias either in favour of activities happening in the cryptocurrency world, or indeed against it. None of which is overly helpful to understanding what Bitcoin and other blockchain technology assets can offer. Nor does it help you the reader to come to your own conclusions about each one.
So what can you do to ensure you take the right things away from your reading and research?
The importance of doing your own research
First of all please do your research, get to the point where you know what the right questions to ask are. Everyone begins not knowing what they don’t know, so it’s difficult to ask the right questions at first. To begin with most people try to liken Bitcoin and the blockchain to money or banking as we currently understand it. However, Bitcoin is revolutionising the way we can transact with one another without the need for a bank, so it requires a different way of thinking.
Get to the point where you know how to understand the motivations behind different cryptocurrencies, or to give them another term crypto assets. This will help you enormously cut through a lot of nonsense.
BitcoinBro’s blog is designed to help you with this. If you have a question, please ask us and we’ll look to add more content that answers all your questions. We will be reviewing the different crypto currencies, looking at their purpose, the “white paper” which is effectively the business plan for each cryptocurrency, how each “white paper” theory compares with each cryptocurrency’s operations of today and how best to store each asset. All this to come in in future articles.
Where to begin?
Bitcoin is the mother of cryptocurrency based on the blockchain, so start there with your understanding. Its technology is open sourced which means anyone can access it, download it and modify it for their own new development. This is why there has been such a rise in blockchain projects, because you can take the existing technology and tweak or change it for your own use. The way it is set up does not mean that anyone can choose to change the Bitcoin software however, as this first requires consensus across the network.
What is the purpose of Bitcoin? The white paper (the concept of Bitcoin) was released in 2008 following the financial crisis as an alternative payment system. Its central message was that banks, governments and economies rely on corrupt centralised organisations and have too much power over individuals. That layer of protection that banks could offer your money from governments no longer exists or is greatly diminished.
Bitcoin’s public distributed ledger technology allows anyone anywhere with access to the internet to be able to transact without permission from a bank or other centralised system to anyone else globally who also has access to the internet. In doing this, Bitcoin circumvents the need to rely on these intermediaries.
On the face of it this might not be something you see as useful or valuable if you’re living in a wealthy country. For others, like Venezuela, Zimbabwe, Cyprus, India or South Africa, too name but a few, this offers real value.
How many countries have you seen where governments have put in place practices that ‘we’ would oppose? What would happen if your government did similar? What do you trust banks, corporations and governments to look after on your behalf? What don’t you trust banks, corporations and governments to look after on your behalf? Does this match with the way the system currently works? Are you happy with the balance in the level of privacy and lack of transparency that centralised systems have compared to the levels you have as an individual? Depending on how you answer these types of questions will help you establish whether or not you see value in the solutions that Bitcoin and other alt coins are offering.
Blockchain, the technology which Bitcoin sits on, can solve many other problems by removing the need for intermediaries and providing transparency. Unless you can continue to offer value in the chain, your services will be at risk. Just as email replaced letters and dramatically reduced the need of the post office, smart phones and internet connections have dramatically replaced land lines and digital music disrupted the music industry, Bitcoin and blockchain technology is set to disrupt the financial world.
As we’ve mentioned before, some alt coins are looking to solve the same problem that Bitcoin is designed to do but has yet reached the capacity to do so cost efficiently enough, fast enough and at scale, and others are looking to solve entirely different problems.
Many others are designed to make money for a select few regardless of the cost to others, ie they serve no real value. Many are scams.
Understand where your motivation to learn more comes from
Depending on your where your interest lies will impact where you do your research, which platforms to focus on, which players in the market you’ll follow more closely and what is important to you.
In forthcoming articles we’ll be covering what to consider and recommended resources if you’re:
⦁ Investing for profit – (this is where I see the greatest potential for getting burned)
⦁ Interested in understanding more about the technology and cryptography
⦁ Seeking to solve a problem that you believe blockchain might be the answer to
If you just want a better understanding of what this Bitcoin thing is, then this blog will help you with that too.
Does the article have a good use of measured words?
In the meantime, as you continue your research consider if the language being used is designed to be contrarian or shows clear disdain or over exuberance rather than being reasoned and thoughtful. I would be immediately aware of the authors strong bias, either positive or negative towards cryptocurrency and the specific topic being mentioned. I might also question their knowledge.
Look for facts first, then followed by the authors opinion, so you can see how they got to that conclusion and decide for yourself if you reach a similar one, or if you need to do more research (ideally sources will be referenced that you can easily do further research from). It’s good to have a broad section of material from naysayers, those who profess to be neutral and through to cheerleaders for Bitcoin and other crypto currencies/assets. You’ll also notice within these communities varying opinions about the current and future relevance and usefulness of Bitcoin, blockchain and other crypto currencies.