11/22/2013 - No Comments!

What Bitcoin Is Not

The adoption and acceptance of Bitcoin (BTC)  has been building for many years, since it's anonymous introduction to the world in 2009 by Satoshi Nakamoto. However, in these last few weeks the digital crypto-currency has escalated to new heights, both publicly and monetarily. In the last few days, the term Bitcoin has been a top-runner amongst Google's hot searches and trends, leading to thousands of articles, discussions and tweets around the world. Sadly, the fact remains that the majority of people still don't understand a few core concepts behind the digital currency.

 People fear most what they don't understand.

Let me be the first to admit that the concept of a digital, unregulated currency is tricky to wrap one's head around at first. It took me a few hours of research, buying a few, selling a few and more hours trolling  popular forums on the subject to understand it fully. While it is a confusing subject at first, the recent portrayal of BTC in the media has been further confusing the most people. I hope to help clear up a few of the most glaring misconceptions in this quick article.

Bitcoin Is Not Physical.

Far from it! A fundamental basis of the Bitcoin philosophy is that it is digital and not susceptible to inflation. No government entity controls the amount of Bitcoins available, like with fiat currency. There will only ever be a 21 million in circulation, roughly 12 million of which already exist. Every story in the news includes a photo of round, golden coins complete with a B emblem on them. These do not exist, and are used (stupidly) for illustration purposes only. Below is a screenshot of top stories on Google news, notice any recurring elements? No wonder everyone is so confused!

physical bitcoin in the news

Bitcoin is a bit of code. Technically, this code can be printed & stored offline in a paper wallet for increased security. However, what you are protecting is only the digital code that will make that bitcoin a reality in a digital space.

Bitcoin Is Not Anonymous

Bitcoin can be spent anonymously, but it is the responsibility of each user to decide what precautions to take when buying/spending with with bitcoin. There are plentiful great posts about protecting your personal privacy when using bitcoin, but safety is not guaranteed. Be sure you know what you're doing before sending your BTC around the web, as all transactions are irreversible. As a peer-to-peer network, all bitcoin transactions are public and stored in the bitcoin network.

The media has been painting an evil picture of the bitcoin network as one full of Anonymous hackers and black market drug dealers. As with any currency, including the US dollar, there will always be a small group of people using it for the wrong reasons. This does not invalidate BTC as a serious technological advance in worldwide currency. The media's portrayal of an anonymous, evil currency could not be further from the truth.

If you are concerned with anonymity, it's recommended to use a different "address" for each and every bitcoin transaction. The most anonymous way to buy bitcoins remains to be in-person, with cash. Localbitcoins.com is a great resource for just this. Be sure to only buy from sellers with good history, and only in a public, well populated space. Be careful out there!

Bitcoin Is Not Only Round Numbers

I've heard people saying over & over again that they "missed the boat" on buying bitcoin, since it's value is so high at the moment. You do not have to buy an entire bitcoin! To understand this concept at the most simple level, think of each coin as a dollar bill. You can have a few quarters, dimes, nickels or even pennies. In other words, bitcoins are divisible! More so than a dollar bill even. In fact, you can have any divisible amount of one bitcoin, down to 0.00000001!

As the value of the unit of 1 BTC grows too large to be useful for day to day transactions, people can start dealing in smaller units, such as milli-bitcoins (mBTC) or micro-bitcoins (μBTC). source

My recommendation to anyone hoping to learn more about Bitcoin is to buy a small bit. Go ahead, spend 0.25 cents on some fraction of BTC, just to better understand the concept. Send your dad a few cents, get the whole family involved! It really is a neat concept, and one that I'm personally excited to watch disrupt to many established systems in our world.

Want to practice sending bitcoin? Shoot a penny to my wallet using the address: 1KXNWAtNHsbptYQKrzbjS3yNt65CU5hGFA. ;)

/rant. I hope this helps at least one poor soul to better understand some of the common misconceptions & myths propagated by our misinformed media sources out there. Cheers.

Published by: Ray in 2013, Bitcoin, Learning