Do any of these apply to you?

• I want money that retains its purchasing power over time.
• I want to be able to send money to anyone anywhere in the world and at any time.
• The price of housing has risen dramatically. I can no longer afford to buy a house.
• When I spend money, it seems that the whole world knows exactly what I bought.
• I am unable to get a bank account or my bank (or government) has frozen my bank account.

I want money that retains its purchasing power over time

I can afford to buy less and less despite being told by the media and the government that our economy is fine. I am told that we need inflation for prosperity. Why, then, am I getting poorer by the day. With improvements in production technology, I would expect the price of goods to decline and quality of goods to improve. This is not happening.

The current credit based systems and their currencies (e.g. US dollar) depend on a persistent increase in the amount of circulating currency. This happens in one of 2 ways: Increased lending by banks and the currency’s Reserve Bank monetizing government deficits. This results in an expansion of the amount of currency in circulation and a loss of purchasing power over time. These currencies are not scarce by design and they have to inflate to survive. Bitcoin is scarce money and retains its purchasing power over time.

Bitcoin’s proof-of-work consensus together with the rules for Bitcoin issuance result in a level of decentralization and security that ensures that there will only ever be 21 million Bitcoin. The supply is insensitive to price. This is provable scarcity. No government nor entity will be able to change that.

Gold does retain its value over time, but Bitcoin is better than gold in a digital age. Scarcer, easier to store and move across space and time. Mining, transporting, storing, and protecting gold is energy and carbon intensive.

I want to be able to send money to anyone, anywhere in the world, at any time, and at low cost

Using Bitcoin you can, securely and at very low cost, transfer value over space and time without a third party. You can send any amount of Bitcoin at any time of the day or night on any day of the week to any person located anywhere in the world. No third party is required. You can send very small amounts using layer 2 networks like Lightning or very large amounts (even billions of dollars) via the Bitcoin network at very low cost. All other settlement solutions (including Proof of Stake networks) cannot do this without the risk of third party manipulation or censorship. Bitcoin is a global, public digital ledger that is decentralized and immutable.

The price of housing has risen dramatically. I cannot afford to buy a house

You can blame this on the credit based systems and their currencies as well as their relevant Reserve Banks and the banking system. The Reserve Banks keep the price of borrowing (the cash interest rate) artificially low (well below the rate at which the amount of currency is growing). The interest rate that the wealthy will get from their bank is better than the rate that you will get. Also, the wealthy are able to borrow much more than you. As a result, the wealthy have been buying houses (and farm land). That is one way of trying to counteract the fact that their currency is losing value over time.The problem is that ordinary people need housing and farmers need farm land. Using housing and farm land as an investment is detrimental to society.

Investing in Bitcoin to offset the loss of currency buying power, does not artificially inflate the price of housing or farmland. You can save money that will retain its buying power without affecting the ability of people to own a house or for farmers to acquire farmland. Having savings that retain their value, allows you to more effectively save for a downpayment on that house.

When I spend money, it seems that the whole world knows exactly what I bought

I am sure that you have noticed that, after buying an item with your credit card, ads relating to that purchase find their way onto your social media. I want my privacy when I spend money. Privacy is important to our daily lives e.g. when we interact with our health providers. This is not the same as secrecy. Our health provider is privy to our interaction but they keep that interaction private. I expect that same privacy to be extended to how I spend my money.

Bitcoin provides that privacy. If I spend Bitcoin using the Lightning Network, Chaumian e-cash, or Bitcoin twins like ckBTC then that transaction is private and no information linking my purchase with my identity will be leaked. Bitcoin does not provide secrecy though and transactions can be traced if an address can be linked to a specific person’s wallet or exchange.

I am unable to get a bank account or my bank (or government) has frozen my bank account

Over 2 billion people do not have a bank account. You may live in a remote area or you may live in poverty. If you earn your money running a business that is not accepted by your government or bank, then you may not be able to get a bank account. This can happen even if your business does not break any laws. If you protest an action by your government, you may have your bank account closed. This happens in so-called developed nations as well as developing nations, in democracies as well as in dictatorships. With the advent of central bank digital currencies, these restrictions are only going to get worse. We are staring 1984’s ‘Big Brother’ in the face.

Bitcoin is a freedom technology and does not discriminate. Everyone can have their own bank on their smartphone. Even those who can only afford an older phone, can use Bitcoin e.g. Machankura.

Common, ill-informed statements about bitcoin

'Bitcoin is not money'

'Money is any good that is chosen by the free market as a medium of exchange. It fixes the problem of coincidence of wants’ - Murray Rothbard. Bitcoin is used as a medium of exchange i.e. Bitcoin is money. Bitcoin is fungible and has demand, divisibility (100 million sats per Bitcoin), durability (store of value due to provable scarcity), recognizability (easy to verify its authenticity) and transportability. These are all attributes of money.

Note that, to be money, a medium of exchange does not have to have low volatility. A money with low volatility is useful if you are going to use that money for short term exchange or as a unit of account. For long term exchange it is more important that the money does not lose value. Bitcoin has been durable in the long term. Everyone can see what inflation is doing to their $ purchasing power. Bitcoin is provably scarce and provides a monetary level playing field for individuals and countries. There will only be 21 million Bitcoin. Throughout history, governments have manipulated money to suppress their citizens and the citizens of other countries. They cannot do that with money that they do not control.

'Bitcoin has no intrinsic value'

A good that is used as money does not need intrinsic value. For example, credit based currencies like the US dollar that have no intrinsic value and rely on government decree for their value are known as fiat currencies and are widely used.

The value of Bitcoin is the value of its attributes: provable scarcity and the ability to transfer value across space and time without a third party (achieved by solving the Byzantine Generals problem). The value of bitcoin is never going to zero. Even if there is no value to the solution to the Byzantine Generals problem, bitcoin is scarce and will remain scarce and there will always be a demand by some to retain bitcoin.

'The Bitcoin network uses excessive energy and is bad for the environment'

To secure the Bitcoin network, proof-of-work consensus uses a large amount of energy. But how can you even debate this issue without looking at the current financial system. Nobody looks at the direct and indirect energy costs of the current system. Hypocritical? The argument is made that the Bitcoin network uses more electricity than certain countries. But, the entire Bitcoin network can be run on the surplus energy from a single province in one country (e.g. Hydro-Quebec).

There are other benefits to mining Bitcoin:

• Electricity production often does not match the demand and the storage of excess electricity can be very expensive. Using that excess energy from a renewable source to mine Bitcoin can give the electricity producer or government an extra source of income. That extra income is being used to make marginal renewable projects economically feasible. Also, in remote areas, the income is used to build out the infrastructure needed to electrify villages e.g. from hydroelectric or geothermal sources.
• Bitcoin mining can be used to stabilise an electricity grid - if there is a sudden demand for electricity, Bitcoin miners can be switched off to meet the demand and then switched back on again when the demand decreases. No other industry can do this. ERCOT in Texas is an example of this.
• Methane gas flaring is common in oil and gas fields. Instead of flaring or releasing methane gas into the atmosphere, the energy in the gas is converted into electricity to run Bitcoin miners. Similarly, methane gas from landfills is increasingly problematic. This methane can be used to power generators that power Bitcoin miners thereby reducing methane emissions (reduce the methane emissions by over 50%).
• Bitcoin miners release heat and that heat is being used to heat homes (e.g. Finland) or used for horticultural and industrial purposes.

Bitcoin competes with Gold as a store of value. Gold mining is energy intensive. A single 15,000 ton per day surface mine, approx 6.28 trillion btu/d is used to extract the ore and waste. A further 815 million btu/d is needed to extract the gold. You still have to transport and store the gold. This does not include the environmental damage from the mine, equipment and byproducts.

Adding blocks to the Bitcoin network is a fixed energy cost - a block is going to be added approximately every 10 minutes no matter what. Adding a transaction to the block adds very little extra energy (the use of your electronic device and network). The Internet is also a fixed energy cost. Sending a tweet is like adding a transaction. In the 90s there were similar complaints about the energy use of the Internet.

The current financial system encourages a short term orientation. The amount of money in the system is growing every year as Governments try to force inflation in the face of deflationary technological improvements. They encourage us to Spend! This has driven consumerism and an exponential rise in energy use since the 1970’s. Bitcoin encourages a longer term orientation. The entire world’s economy could be run with Bitcoin as the settlement layer. The energy savings would be massive.

Bitcoin Mining: The Unlikely Environmental Hero w/ Daniel Batten | The Culture Bit

Bitcoin’s Carbon Footprint Revisited: Proof of Work Mining for Renewable Energy Expansion

'Bitcoin is used by criminals. It should be stopped!'

Of course it is used by criminals. That is because it is a viable medium of exchange i.e. money. Criminals have always been among the first to use new technology and they will use any medium of exchange that they can (the US Dollar is still the most popular).

The 2024 Chainalysis Crypto Crime Report estimates that the total value received by illicit cryptocurrency addresses represented 0.14% of all on-chain transaction volume (40 to 51 billion US dollars). The United Nations Office on Drugs and Crime (UNODC) estimates that the annual volume of money laundered globally ranges from 2% to 5% of the world's GDP. For 2024, this would translate to an estimated US$2.22 trillion to US$5.54 trillion flowing through the global financial system. As you can see, illicit cryptocurrency use is a tiny fraction of global money laundering.

Using Bitcoin for criminal activities is not the smartest option. The network is an open ledger and transactions can be traced if an address can be linked to a specific person’s wallet or exchange. Also, law enforcement can freeze a wallet if that wallet is on a 3rd party network.

It makes no sense to say that Bitcoin should be ‘banned’ because it is used for ransomware attacks. If we did not have the internet, we would not have ransomware attacks at all. We do not try to ban the internet. The problem is poor organizational security when exposed to the internet.

'Bitcoin is a ponzi scheme'

A Ponzi scheme is a type of fraud where funds from new investors are used to pay profit to earlier investors. This requires a 3rd party with the power to move the funds. Bitcoin is decentralized with no 3rd party involved. Bitcoin itself cannot be a Ponzi scheme. Ponzi schemes can use Bitcoin in the same way they can use dollars.

'Bitcoin's proof-of-work consensus should be changed to a proof-of-stake consensus'

Governments, companies - they are proof-of-stake. Temporarily useful but not decentralized. Wealth and power eventually concentrate in the hands of a few and history has shown that they all inevitably destroy themselves.

'Bitcoiners are all toxic and right wing extremists'

Belief in the free market system does not make one ‘right wing’. We have not had a free market in money since the early 1900s. What we have had is ‘crony capitalism’, where certain individuals and businesses profit from being close to the money source (banking system, governments). Free markets do not favour one group over another. They are exactly what they say they are: ‘free’. Extremists from the right and the left are all the same. They do not want freedom, they want control. Bitcoin is decentralized, meaning that it cannot be controlled and it is money for everyone, not just the select few and it is a threat to the extremists.

There are ‘Bitcoiners’ with a wide range of beliefs. Sometimes one group shouts louder than the other but they do not represent all ‘Bitcoiners’.

Suggested reading

Broken Money - Lyn Alden

Resistance Money - A Philosophical Case for Bitcoin - Andrew M. Bailey, Bradley Rettler, Craig Warmke

Bitcoin Age - Nik Bhatia

Bitcoin information and resources curated by Jameson Lopp