Bitcoin 101

Bitcoin 101

“I don’t even know what to ask!” — Everyone

Click here… to see what to click

So how does it all work? What is Bitcoin, even? Well, here’s my last summer’s talk on the tech first heralded by Nakamoto’s seminal 2008 whitepaper. The slidestranscript, and subtitles are free to use and chapter (plus FAQ) navigation is available right on YouTube. Subtitles are especially recommended because my mumbling is only made worse by the speed at which I go, especially when I get excited.

The entire thing was geared toward complete newbies to the scene, springing from a little bit of social networking history right into the heart of mining, ether, blockchains, and all the other tech terms briskly becoming buzzwords. My best advice is to carve out two hours from a weekend, grab a coffee, and just listen.

Now the written summary (but seriously, watch the video first). For starters, everything in this post is information I’ve Frankensteined together in my free time between full-time work and school in very different fields… so don’t exactly expect mistakes but also don’t be shy about letting me know if a correction is needed. That said, here are the basics!


Intro

Bitcoin has really followed the trajectory often misattributed to Gandhi “first they ignore you, then they laugh at you, then they fight you, then you win” and is now successfully navigating its MOP and sociopath invasions. The entire movement is in the “fight you/you win” transition in the first and has built up a solid technological base in the second, drawing in the Members of the Public the consumers who bring the capitalists in like piranhas. But I mean, with BTC suddenly jumping the $12,000 CAD mark this past November ($10,000 USD, ~€8,500), of course everyone wants in. The train may have left the station but at least you can still see it… that said, if you’re here to make a quick buck, skip right to the “caveat” sections. It’ll save you many, many headaches.

Tech aside, the first (and really, only) Bitcoin bug that bit me was its potential of shaking ideas free from economic repression. If a professor can make over $50,000/month via crowd funding, and with the growing advent of MOOCs and micropayments, I can only imagine the upcoming impact of such technologies on independent publishing and discussion proliferation. This suddenly gives a whole new meaning to “voting with your money”… but you already know this from the video, so let’s dive deeper in.

What exactly is Bitcoin?

Let’s start with some key definitions. Cryptocurrencies (akadigital currencies“) are points systems usually trying to become currencies, like the dollar or the euro, only not backed or even created by any government or national entity (at least, not yet). They are recorded digitally and verified by the entire community, where a flaw in any one record renders it void without affecting the rest of the system. This is due to the system’s decentralized architecture (everyone holds a copy of the whole thing) and results in the main benefit of redundancy: all nodes must be taken down to cripple the system. Despite early rumours of the anonymity such a network provides, this characteristic actually renders each transaction pseudonymous. Since all transactions are completely public, it is not only very simple to follow an account’s entire history on the network, but also possible to reconstruct the identities behind other accounts it’s interacted with once its identity is known. Further, since blockchain activity is recorded permanently by everyone, it can be analyzed many years after the fact… something law enforcement has already been doing for years. That’s the “currency” bit: the “crypto-/digital” bit refers to the advanced use of cryptography and informatics to run the network and keep it secure, specifically the brilliant discovery that is public key cryptography. At its base, crypto is simply information. All money is simply information.

Bitcoin as distributed tech (p. 2)

Bitcoin (“BTC”, “XBT”, or simply “₿”) was just the first such currency. There are now hundreds of others. To understand this entire ecosystem I’ve found the metaphor of gearing up in a car to be useful: there are about eight main “gears”, each building on most of the others. The key, however, is to change your perspective on money and, indeed, information to proceed. This really is one of those “forget everything you thought you knew” moments.


Blockchain anatomy: The Ledger

The first gear is understanding that bitcoin, at its core, is a “programmed ledger“. That is it’s an open source computer program (meaning anyone can view it in its entirety) containing both the rules outlining how it behaves as well as a database of all its past behaviour: a “chain” of code that updates with each additional command sent to it. The second gear is that the ledger gathers new commands sent to it in bundles (monetary transactions in the case of bitcoin), tying each irreversibly and linearly to the remainder of the chain in “blocks“, building block on top of block on top of block approximately every 10 minutes (one of the rules in the ledger, with block-building difficulty adjusted roughly every two weeks to keep it so)… ergo the blockchain. This tie is called “hashing” and it involves some fancy mathematics.

Eg: Each block in in this blockchain contains three transactions, all tied to preceding blocks via hashes (back-arrows)

Every node (network member running a full copy of the blockchain) always reflects the most recent state of the blockchain by automatically updating to the longest chain as soon as it’s available. This ensures all blockchains in the network are the same, though, since their size has grown to over 150GB, people are increasingly trusting blockchains from nodes already on the network instead of running their own. This technology has developed such that it’s “massively more profitable to mine than to hack“. That anyone can make as many accounts as they’d like (something recommended for every transaction, in fact; p.6, §10), adds a further layer of security to the whole system. The bottom line is that any blockchain that differs from the rest is immediately rendered incompatible and so is discarded. This is the heart of crypto.


Mining: coin creation

The next three gears run deeper and are slightly more complex but are very key to understanding the system fully. They address the concept of mining, how it works, and how it creates new bitcoins. Mining is the act of third-parties (miners) verifying transactions in the network against their copies of the blockchain using very advanced computers. Miners verify transactions by pitting their computers against each other to mine the next block. Whoever can solve an incredibly difficult mathematical equation first, based only on random attempts, wins a hefty reward. For every “block” they “mine” (ie: “bundle of transactions” they “verify and add to the blockchain”) there are about ₿2.5 to be collected in fees, plus a mining reward in the form of newly-created bitcoins, currently ₿12.5 (another rule in the blockchain). All told, a miner receives the equivalent of about $150,000 USD ($190K CAD, €125K) in bitcoin fees and new bitcoins at November/December 2017’s prices… a process that repeats, again, every ten minutes. On top of this, miners are highly disincentivized to be corrupt because verifying the blockchain is very expensive, both in terms of specialized equipment required as well as in paying for the tremendous energy being consumed while mining (as all money does)… better use that energy to make money directly. Bitcoin has harnessed human greed for human good.

A typical mining farm, c. 2014. They’ve only intensified since.

Since attempts are all random, having a computer with the greatest processing power is key; having multiple computers is even better. Currently, the biggest mining organizations have entire warehouses of computers at their disposal and are running 24/7… so the chances of becoming a successful miner are, well, quite minor.

Triple-entry accounting: the biggest innovation everyone missed

The above section holds the toughest ideas to chew through in this entire explanation because of its application of triple-entry accounting, the biggest breakthrough the blockchain offers humanity (17:43). Single-entry accounting was used as early as 5,000 years ago in the Sumerian cultures, with a simple note from either the buyer or seller that money had been exchanged. This system was easily corruptible. Double-entry accounting raised this a notch by suddenly requiring both the buyer and seller to keep copies of their ledgers, copies that had to be in agreement. It came about independently in several cultures, from early Muslim nations in the Arab world 1300 years ago to Korean dynasties 1000 years ago, but wasn’t preserved globally until after the invention of the printing press. Reappearing in use again by Venetians in the 1400s, it was finally formally codified by a Franciscan friar living in this naval merchant republic in 1494. Double-entry accounting is much more accurate than its predecessor, but still allows for bad actors to collude in “cooking the books“. Triple-entry accounting, on the other hand, well:

“Triple-entry accounting — and by extension blockchains and crypto — are a way of agreeing on objective reality. It’s not the objective reality. That’s a philosophical black hole we’ll ignore for now, but it’s an objective reality. It’s two parties agreeing on a version of past events. The third entry in the system, entered into the blockchain, is both a receipt and a transaction. It’s proof that something happened between two parties, which goes beyond the receipts that each party holds in double entry.”

This explains why every transaction on the bitcoin network must be verified by miners to be valid, why some transactions take a few minutes to take hold, why forging bitcoins is currently impossible, and why the system doesn’t rely on trust at all, unlike normal banking. Not only do your and and your transaction partners’ ledgers have to match, but they must match a random, unknown miner’s ledger. The chances of all three being corrupt in the same way are currently inconceivable.

The Halvening(s)... and how many bitcoins are there exactly?

The mining reward mentioned earlier halves approximately every four years, and will result in the ultimate creation of 21 million bitcoins. The reward started at ₿50 in 2009, dipping to ₿25 in 2012, then ₿12.5 in 2016, and the next “halvening” is set to drop the reward to ₿6.25 in 2020. This trend that will run its course until either the world stops caring about Bitcoin and moves on to something else, or until the last satoshi is earned (as a dollar has a hundred cents, a bitcoin is divided into one hundred million satoshis, named after the cryptic founder of the whole shebang). When the last satoshi is mined, verifications will run solely on transaction fees. Though satoshis are not really used as a unit of currency just yet because of their extremely low worth, as Bitcoin’s value escalates so too its main operating unit changes. Currently, a millibitcoin (mBTC) is the unit that makes most sense, worth ₿0.001 or about $10 USD ($13 CAD, €8).


What the fork?

The sixth gear addresses forks. Sometimes two blocks are created almost simultaneously, temporarily branching the blockchain. This is quickly resolved as the original whitepaper outlines:

“If two nodes broadcast different versions of the next block simultaneously, some nodes may receive one or the other first. In that case, they work on the first one they received, but save the other branch in case it becomes longer. The tie will be broken when the next proof-of-work is found and one branch becomes longer; the nodes that were working on the other branch will then switch to the longer one.” (p. 3, §5)

This is because the longest chain has the most verifications and so is the most trustworthy — when a new block is created by a miner, the miner verifies both it and, in doing so, all the blocks in the chain behind it. To continue mining on a shorter chain is economically unsound: you are now facing off against the entire network building on an already-longer chain. On the blockchain, length really is strength.

Genesis block, blockchain, & abandoned forks

… that said, Bitcoin alone has already forked many times, with fork developers hoping to harness people already on the network onto their chains in a fight to see who holds the crown of “the” Bitcoin. So far, Bitcoin Core has survived every attempt at derailment, sprouting Bitcoin XT (Aug. 2015-heavy decline), Bitcoin Unlimited (Jan. 2016), Bitcoin Classic (Feb. 2016 – Nov. 2017), Bitcoin Cash (Aug. 2017), Bitcoin Gold (Oct. 2017), plus over 50 other, much less popular forks (heck, you can even make your own). Due to the fork anatomy, any funds you owned on the original blockchain before the fork suddenly replicate, leaving you with coin ownership on both the original chain as it continues to develop as well as on the forked chain as it starts to take off. And some of these forks are worth substantial amounts of money so people hold on to them, waiting to see how things shake out.


Altcoins

The seventh gear addresses altcoins: alternative coins that copied bitcoin’s idea and often its code as well to build more specific cryptocurrencies for more specialized uses.

Doge, the story that writes itself.

Some were made to improve on bitcoin (decreasing block size like Litecoin, speeding up the network like Dash, increasing anonymity like Zcash and Monero), some were inside jokes based on internet memes (Dogecoin, Pepecash), some adopted the blockchain for their own preexisting projects in related industries (Ripple, MaidSafe), and some replaced social network “likes” with coins to fuel content creation and curation (Steemit, LBRY, Yours, Synereo, Everipedia).

Just some of the smorgasbord available

Many altcoins are sold in Initial Coin Offerings ICOs similar to IPOs from companies going public on the stock exchange. The last year especially saw a real flurry in ICOs with increasingly sketchy ones showing up as it became clear that hundreds of millions of dollars in crypto could be made by creating and then trading one’s own altcoin for established crypto. Investors would happily flood the coffers of many half-baked projects with bitcoin or ether, speculating on their future value based on promises by developers to build some special technology that would use them… cha-ching!

This is unprecedented in human history, that individuals can create their own point system that is suddenly directly tradeable for other point systems, including money, on such a mass scale.


Ether, smart contracts, The Flippening, and the DAO (hack)

The eighth and final gear is the second brilliant breakthrough of this space: the realization that other information can be stored and exchanged on blockchains… not just transactions of value but that directions and stipulations can also be added as needed. At its simplest level, a bare bones “if-then” transaction of the type “pay 10 satoshis to account #12345 for every 1s logged by account #67890” is suddenly possible. This is an example of a micropayment, something that cryptocurrencies suddenly enable, along with much more complex transactions based on any condition imaginable (stock charts, weather, anticipated future events, populations, test results… the list scales up to medical records and unforgeable university diplomas).

These transactions are called smart contracts, and are the main force behind perhaps the most famous altcoin out there, ether, made on the Ethereum platform. Ethereum went through its own fork due to its DAO hack and split off into what are now called Ethereum and Ethereum Classic. Despite this turn of events, Ethereum is particularly active and many projects are already building altcoins based on its smart contract-enabled code just as they are with bitcoin, for the same reasons outlined earlier (eg: Ubiq).

Ethereum is so active, in fact, that many in the crypto community suspect its value will soon overtake that of Bitcoin — “the flippening” — simply because of the added uses it presents on top of just payments. It is already being investigated by Canada to foster transparency in government (source; a nicer prototype), something I can certainly see quickly combining with grassroots citizens’ efforts in developing transparent metrics to keep politicians accountable (eg: our very own TrudeauMetre up in Canada)… something DCTRL’s own Taylor Singleton-Fookes has already been working on for years.

Caveat emptor

Okay. A breath. Now a moment to let reality sink in. This talk was filmed well over half a year ago and the crypto landscape has changed a lot since then. The motto really seems to be “7 steps forward, 2 steps back, and again, and again“, with Bitcoin itself being declared dead an average of twice a month in the decade since its inception. On the plus, yes, I only see this technology improving and evolving further, suddenly enabling tech I cannot even being to imagine… just like the web enabled the Internet and email, leading to web pages and forums and search engines and social networks and, ultimately, to cryptocurrency itself. I mean, just look at what the forums have to say on this topic, right:

However, the price of anything infinitely growing in value is just not sustainable. I recently read a piece (enter via Google if that’s blocked) that really made me rethink this whole “crypto’s going to the moon” and “buy bitcoin, it’s going to be worth $1 million dollars in a few years” pitch. Another excellent article paints a more realistic picture of the current crypto landscape, outlining how to make sound guesses for specifically Bitcoin’s final value based on what needs it fulfills. That is, if you think its worth is primarily as a store of value or as cutting through red tape, then compare it to gold’s ~$8 trillion USD or Western Union’s ~$9 billion USD market caps… resulting in a $400,000 v. a $400 USD bitcoin when all’s said and done. Of course, it could be a mix of multiple use cases, plus economical surprises, plus an often irrational market, plus, plus, plus… Here Vancouver’s own one-time election hopeful, Alex Millar, hints at the expected upward trend that’s prevalent in the crypto community with just the perfect flair:

That said, these are not video game points: crypto just cannot infinitely go up and up and up. Now my head is filled with ideas of external forces (legislation but, more importantly, the market) exerting pressure on crypto’s value. What would happen if the price of cryptocurrencies suddenly rivals or even overtakes the value of all other currencies in the world? What kinds of political actions and social movements would this spark? Food for thought… but maybe don’t sell your house for crypto just yet unless you really know what you’re getting yourself into. Here are some pictures to help you mull it all over, with bullish positivity quickly turning bearish, urging slow movement and caution for any newbies to the scene. Buyer beware!

… now that said, I can’t help but wrap this section up with a favourite speaker of mine on the topic, underlining that monetary value is hardly the main reason anyone should start getting into crypto… much like a search for fame clearly isn’t the main reason the world is adopting the Internet (the entire talk is well worth your time):

“Every single child born today will never have a bank account. They will have a bank app. A bank app that doesn’t give them an account: a bank app that makes them a banker. An international banker. In an app. They will not be permitted to open a bank account until they’re 16 years old. By that time I hope they will have at least six or more years of experience with digital currencies, and I would like to watch them walk into a bank branch to have someone explain to them what 3-5 business days means.”


Caveat mercator... and taxes

The same applies to trading crypto. I’m meeting increasing amounts of newbies interested in making a quick buck by “investing” in some obscure coin and hoping it’s “the one”. Well, there is hope, but it’s at the end of a long, long tunnel of pain and stress and sleepless struggles sifting through tons of tulips. Like a trader I started following lately recently wrote, “To get great at trading you have to lose a bunch of money fast and fail to outperform the market before turning it around. But the odds are against you. Human nature is against you. Emotions are against you. Everything is against you.” But perhaps the best summation of common pitfalls I’ve read so far come from, again, that great article mentioned in the previous section (definitely worth the read if you can find an hour):

“The most common mistake people seem to make is investing solely based on the price alone and its short term historical trajectory, and nothing else. The second mistake is investing in assets that they don’t actually understand or believe in long term, are not planning to hold for at least 5 years, and will be tempted to sell if the price begins to fall in the short term. The third mistake is believing that they’ve already missed the boat on the most established and successful cryptocurrencies, like bitcoin and ethereum, and that consequently they should invest in much less established, much more speculative ‘altcoins’ to achieve truly outsized gains, for no truly good reason besides the fact that the price/market cap for the altcoin is a lot lower than bitcoin’s, and seems like it has more room to grow. The fourth mistake is day trading, and trying to capitalize on short term market movements”

I have done many and seen all of the above. In this time I’ve discovered there are three types of people in crypto right now, here for unique combinations of two vastly different — and generally mutually exclusive — reasons: into crypto because of crypto, and into crypto because of money. See, the Supporters showed up first, melding passion and, shortly after, knowledge, buying coins to use them based on a firm belief in their intrinsic value. Next came the Investors, understanding crypto’s applications and the first waves wanting to use it, with subsequent waves wanting to capitalize on it. Lastly, and this is the phase we’re in now, came the Speculators. They’re the voices that hint greed and, more often than not lately, a crippling hope that they’ve found a golden ticket to a financially secure future. They don’t realize they’re the ones the earlier Investor crowd is pumping up and then dumping on, leaving entire whackloads of easily manipulated, ultimately cheated bagholders disillusioned and embittered in their wake… and one of the reasons jokes like these have started popping up more and more:

Q: A vegan, a CrossFitter, and a bitcoin trader walk into a bar… who tells you first?
A: If you’re attractive, then the CrossFitter. Otherwise the vegan. The bitcoin trader just interjects every few minutes with what you would be worth had you gotten in at the start… which he didn’t.

Humour aside, these folks are also, unfortunately, blind to the sage advice from the article above: “Under no circumstances should one ever buy into a stock without knowing much, or anything at all about the stock, save for the general market sentiment or hype surrounding it, and its short term price movements.” This misstep is what makes scams so wildly successful in this space. My advice? Treat any money put into crypto as lost for good… because there’s a very good chance this is what will happen first. As Issawi’s Law of Progress clearly states, “a shortcut is the longest distance between two points”… and this certainly applies to the path to riches. Trader beware!

And lastly: tax. The situation is moving too quickly to list how it stands in every major country but Canada’s rulings are slowly clarifying since Andreas’ visit to our senate three years ago (TLDW: give it time before you start regulating it). Currently, you must pay both income and capital gains taxes on any crypto received as payment or made on exchanges… though it is not immediately clear if this last one applies to individual gains or just for the net gain/loss sums. In the US it seems even more convoluted… but I’ll leave it at that for now and we can all watch the situation develop.

Caveat futurists, socialists, idealists & all other optimists

Crypto is new, the blockchain and smart contracts newer still, and many in this space are still focused “on the solution and not the problems“. Saving the world is still quite a ways away, with much of the necessary underlying infrastructure only starting being created now. We’re still figuring this stuff out so be wary of throwing all your enthusiasm behind half-baked, seemingly life-changing technologies just yet… give them some time, watch, and observe. From a very good, very constructively critical piece on the topic:

“… new Blockchain startups keep repeating the same message of helping ‘2 billion unbanked’ while targeting digitally savvy and better-off consumers. And what about those poor/unbanked/women that Fintech stakeholders talk about so much? They will be just fine. Even if Fintech, Bitcoin, Blockchain, Mobile Money, Big Data or all digital innovations combined disappear tomorrow, the old technology has been sufficient in eliminating poverty.

“Rather then asking why NO ONE is using Bitcoin/Blockchain for sending money cross-border, including their neighbours, families, and friends, the payment industry pundits prefer to wonder about poor people in mysterious Africa.

“So the biggest barrier to mass adoption might be that a Blockchain/Bitcoin community is still dominated by idealists who are stuck in the ‘Bitcoin = Internet’ paradigm rather than skeptical practitioners who would consider a new payment rail and cryptocurrency to be just another novelty.”

… even Andreas knows it’s going to be a whole lot of blood, sweat, tears and, above all, time to get there.

How I got involved in the cryptosphere

I first heard of bitcoin around 2011 but only actively started dipping into the cryptosphere after discovering Vancouver’s DCTRL community four years later. This was for two reasons. First, I suddenly met people who were fascinated by this topic and the potential it had for making the world a better place people quickly becoming experts in this field when literally no one else had ever even heard of it yet. And secondly, because it suddenly started to dawn on me how cryptocurrency could improve many, many other fields outside just finance. Crypto’s potential for fixing social networking in particular set me off on thoughts I’m still exploring.

<3

Fast forward to this past spring, when I was invited to explain how bitcoin works and why it is so revolutionary at the Eine Welt Camp outside Mainz, Germany. The EWC is a conference/weekend seminar operating since the 80s for mostly young, German-speaking Christians who spend at least a year working in the Global South, generally in orphanages, hospitals, schools, and the like. As such, they regularly see the triad of capitalism using racism for exploitation throughout the world, and are exceptionally well-read in and sensitive to global structures of injustice. The camp happens once every two years under a specific topic. Past renditions have explored Fair trade, Mobility, and Water, and this year it was time for Money to sidle up under the microscope. Among the presenters were Leipzig’s Steffen Henke, a proponent of demurrage (famous in the successful Wörgl experiment), and Enno Schmidt, a main voice behind the Swiss, and indeed, global unconditional basic income movements. That was an absolutely unforgettable experience, which led me to continue reading more about money and, well, now I’ve just started a master’s program in digital currency (more information below), the tuition of which I actually fully financed with Bitcoin… and there you have it!

The spirit at the EWC this past summer

Additional resources

Wrapping up with some practical resources, a thing to note is that prices for all altcoins vary daily and on what exchange you’re using. I originally got all my prices from CoinGecko but lately started using CoinMarketCap and Bitstamp because these are standards the community seems to use a lot (and because their UIs were just nicer and easier to work with). For longstanding Bitcoin trends it’s hard to beat Blockchain.info (especially for a nice, clean, zoomable copy of the full BTC-USD chart, the most important one in the whole field right now). I use Bittrex for trading but will be moving to Bitfinex soon. If you’re Canadian then QuadrigaCX and Tux Exchange are an exchanges where you can purchase most major crypto, including bitcoin, ether, and litecoin. I have heard of many people buying crypto through Coinbase as well, and of course, there’s always a Bitcoin ATM somewhere nearby. As far as wallets go, I use Copay because it was the first one recommended to me. It’s especially handy because most merchants I’ve transacted with who accept Bitcoin use BitPay, a closely related project so compatibility is very high between the two. However, many folks at DCTRL use Mycelium or as well as regular old paper wallets which they print off and store in a secure spot. For altcoins I currently use Jaxx but have also heard good things about Coinomi, especially since both have ShapeShift so converting between coins is easy. Regardless of which services you decide to explore, be sure to turn on 2FA wherever you go.

Lastly, here are links to all the bigger things mentioned in the talk so you don’t have to google: 2:30 Original social networks: StumbleUpon, hi5, WAYN, Couchsurfing, Reddit; 4:40 Facebook per-profile-profits in 2014, ’15, and ’16; 5:49 Uber’s losses; 6:59 Distributed social networks: GNU social, Mastodon, Friendica, Libertree, ownCloud, Hubzilla, identi.ca, Tent, and of course, Diaspora; 8:11 Centralized v. Distributed v. Decentralized social networks, from p. 2 of Baran’s 1964 article; 22:38 Cypriot citizens’ forced bank bailout; 29:00 The mining farm; 30:03 Dump raiding for lost bitcoins; 30:22 2010’s ₿10,000 pizza purchases; 43:30 MIT’s Bitcoin Club and Digital Currency Initiative, Stanford’s Bitcoin Engineering course, VISA’s blockchain patent and blockchain-based payment system, Toyota’s blockchain cars and Uber alternatives; 48:55 Cornell’s Emin Gün Sirer explaining the DAO hack; 52:09 #Blocktalk with Alex Sterk; 54:59 My Steemit post on the new Chinese social credit system; 55:41 Heiditravels’ Steemit account; 56:08 Janna Jihad, the ten-year-old Palestinian journalist; 1:06:53 Bitcoin real estate & Tesla; 1:08:32 BTC-USD price over time; 1:10:57 The Rare Pepe Directory (compare to the most recent CryptoKitties craze on Ethereum); 1:17:21 Reddit football game Bitcoin donations; 1:20:12 BitBonkers; 1:20:57 FiatLeak; 1:21:49 LocalBitcoins.com; 1:22:52 Wired‘s Bitcoin chaperone piece (coincidentally, about one of DCTRL’s founders); 1:24:05 QuadrigaCX exchange (though I’ve heard of many people using Kraken earlier and CoinBase more lately); 1:26:38 Meetup.com (Munich, Nuremberg); 1:28:15 DCTRL’s Bitcoin beer machine; 1:29:56 #Blocktalk, with Alex Sterk; 1:30:34 Consensus conference; 1:31:42 Map of the Internet (2003, ’10, ’15), making the Kaspersky “top 5”, along with a better one; 1:32:22 A “bitcoin” in Der Spiegel; 1:33:39 ASIC boost scandal; 1:36:38 CoinMap; 1:38:13 Microsoft accepting Bitcoin; 1:39:48 Bitcoin-accepting VPNs.


Wrapping up, my single greatest source of information has been Vancouver’s wonderful DCTRL community. They’re always running Bitcoin 101 nights where things get quite technical real fast and you realize wow, this is the future (Montreal has a slowly growing group as well, based around their popular exchange). The second was the University of Nicosia’s free Introduction to Digital Currencies MOOC, a part of their master’s program in the same. It was partially taught by Andreas Antonopoulos, who has the best talks on Bitcoin (and the future) I’ve seen so far. There are also many more resources on Slack, Telegram, Discord, and Twitter… but you simply discover these by talking to folks in the community. A final resource I’ve just discovered is Jameson Lopp’s very well-organized website, great for anyone wanting to dive more comprehensively into this subject. As you can see, this space is positively teeming with life right now, finally making those famous “jobs that don’t exist yet” that we were promised in high school.

If you understand all the above then you’re in the same boat as me now, suddenly knowing everything I was able to piece together since 2012. You can start to see the case for infinite account holders, brain wallets, taxing robots, borderless money… the list goes on. It all brings to mind Satoshi’s famous quote (as part of a response to Dan Larimer, of all people):

If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.

… well, the belief part is up to you, but at least now you get it.

About the writing: this post has taken me well over six months to prepare and more than three to write. It has links, so many links. I hate links but this topic is just too important to not present fully. It might take a few days to read fully too… take your time. The landscape will have changed, maybe even drastically, when you emerge, but it’ll all slowly start to make sense. It might take a few sleeps and late-night talks with friends to get there, but get there it will… welcome to the future!

Updated February 20th to include additional images in the caveat sections.

4 Replies to “Bitcoin 101”

  1. Wow, I totally forgot about this topic again in the last half year. Thanks for bringing it back into my mind; all the information and all the links! Very encouraging. I hope I can make time to get more into it. This blog post will probably make it a lot easier.

    1. Hey, happy to hear that! It’s here, waiting for you when you want to dig a little deeper. It is a lot of stuff, I know, and I hate that too, but this is really one of those topics that merits the extra effort.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.