What is Bitcoin?



A Private Kind of Money

Now it is necessary to know what is bitcoin. Simply it is a means of exchange. In other words it is money. Bitcoin can be used for all of the purposes for which the current forms of money can be employed. In some places it may lack recognition as "legal tender" but that does not mean that it cannot be used to facilitate the exchange of goods and services. This page leads directly from the "Understanding What is Money" ("What is Money") page. It is the second part of the paper written by David MacGregor (Copyright - FreedomConfidential.com - All Rights Reserved) of FreedomConfidential.com entitled Bitcoin : The Money Revolution : A New Currency For a Free Society.The first part described the evolution of money and discussed some of its limitations. The following pursues some answers to the problems of asset preservation so essential especially for retirees. Again this part of David MacGregor's paper is reproduced with his permission.

Discovering What is Bitcoin

Bitcoin Cash - I Don't Think So

This is where Bitcoin comes in. It’s the world’s first digital, debt-free crypto-currency - a money system with no corporate head office, no bankers, no government shenanigans, no central bank, no boss, no branches, no restrictions - and no limits.

To understand the revolutionary nature of Bitcoin, it’s necessary to look at what it is, how it can be used, and how you can literally free up your life by making use of it. The first thing to understand about Bitcoin is that it comes into existence without debt. It is in fact a debt-free currency.

Not Mining Like This!

So how is it created and how does it come into circulation? This is done through a process called “mining”, where individuals all over the world can participate by hooking up specialized computers to the network which enables the Bitcoin system to process and verify all the transactions. By contributing this processing power, “miners” are rewarded with Bitcoins.

This is Modern Mining!

The second thing to understand is that there is a strictly limited supply, with no more than 21 million Bitcoins (or BTC) in existence. And in case you’re wondering how this works, they are divisible to 8 decimal places, meaning you can have 1 BTC or 0.1, or 0.001, or 0.0001 BTC, and so on. As the Bitcoin economy grows, and because the supply is limited, the effective unit of account simply gets smaller to accommodate the increased economic activity.

Bitcoin, contrary to the inflationary fiat paper money we are used to, is by comparison deflationary. What does that mean? Think of it this way: as economic activity and wealth increases the actual price of stuff when quoted in BTC will decline. This is not something to worry about, but rather to celebrate. For just as we are used to high-tech items getting cheaper each year (just think how much computers used to cost!), it is entirely realistic to expect prices to drop across the board, provided economic progress continues.

Wrong Kind of Wallet

The Bitcoins in your “wallet” will actually rise in value, and buy more stuff in the future. This has the effect of encouraging people to save (without the need for interest payments) because a year from now, Bitcoins will likely buy more than today. In other words, it encourages capital formation. And that’s a thought we’ll return to later in this report.

You Need One of These. The Computer I Mean!

The third thing to understand is that Bitcoin runs on a peer-to-peer network of computers, which “collaborate” with each other to process and verify all transactions being conducted by the system. Unlike traditional banking, there are no clearing houses, no banks, no central authority - nothing in fact. The whole system is decentralised and distributed.

Opening an account does not require you to prove who you are, provide ID or a Social Security number, supply references, or disclose your financial information. You can immediately become part of the Bitcoin economy simply by making a decision to do so.

There are many different ways to get started, and these will be discussed in greater detail in the next part of this report. Suffice to say, it’s as simple as downloading a Bitcoin wallet - which resides on your computer or smartphone - purchasing some Bitcoin and joining in the fun and freedom.

The Unique Bitcoin Advantage

You can create a Bitcoin wallet from anywhere in the world, right on your computer, smartphone or online. You don’t need anyone’s permission, or need to provide any information whatsoever - no name, no ID - and if downloading one of the available desktop wallets, not even your email address.

Think of it as the ultimate “offshore bank account”, a place where you can hold funds outside the system. And there is a good reason to do this. For as I’m sure you know, the world is in an economic mess. Countries are going to the dogs, economically speaking, and debt is raising its ugly head, only to be perpetuated by even more debt and enslavement.

Truth is, there is no end in sight to the economic travails. So you really do have to take matters into your own hands, and Bitcoin provides a set of tools to achieve this.

You Stay Under Cover

Governments everywhere are on the lookout for more tax revenue, and also cracking down on existing ways of protecting what is rightfully yours. So what’s a sane person to do? How are you supposed to protect the value of your savings when the currency is constantly being devalued? How are you supposed to prepare for your old age when the economic system is being turned on its head and nothing is certain - not even the money in your bank account?

Fortunately, you do have a choice. You can choose to ignore the warning signs and simply go on as if nothing of significance is happening, or you can do something constructive.

Given the prognosis on global economic affairs, I can say unequivocally that I do not trust the government to sort this out. Not a chance. And as a result, it is imperative to think, and think hard, about the best course of action you should take.

Of course holding gold or silver is also a good way to protect yourself against monetary destruction, and that’s something I do myself. But with Bitcoin you have another option available to you. And the good news is, if you make the effort to understand it, and get to grips with how revolutionary it really is, you’ll then see the potential and be motivated to act on it.

More importantly, you’ll likely see how Bitcoin - as a non-government, non-bank, cryptocurrency - provides an alternative means of achieving your freedom goals. And not just for you, but for society as a whole, looking into the future.

The Retiree's Choice

Of course the protection of assets is not just for the retiree. All solutions suggested here are for everybody. Knowing what is bitcoin provides the opportunity for safety from all who may be a threat to one's money. It also provides a way of moving money about the world without involving banks and governments. This is particularly important for those with American connections because of the difficulties caused by FATCA. A second and more detailed picture of just what can done with bitcoin is provided again by David MacGregor in his latest paper on this subject. Protection and privacy can be achieved again in what is promoted here as an alternative to offshore banking. However the latter remains a basic first and simple step towards the security of funds even if the privacy aspect has been devalued in the past few years. Unfortunately Americans, citizens and residents, are now affected seriously by the oppressive application of FATCA requirements on them and their banks.


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