Bitcoin FAQ's
A list of some of the most frequently asked questions about Bitcoin that most struggle to answer.
Lately I have been thinking a lot about “biases” and how detrimental they can be to a polarizing and growing community. Whether that community is driven by politics, religion, nationalism, or something more… an unconscious bias can destroy progress.
We are seeing this right now in the Bitcoin community. The more time I spend on discord, twitter, or just general engagement with Bitcoin community members the more I realize just how far down the rabbit hole people have sunk. To me, it feels as if the majority of people who consider themselves to be “Bitcoin advocates” believe that this currency will take over the world. They don’t know how, but they are absolutely positive that it is going to happen. If you disagree with them, your logic is false.
This is a peculiar situation, because I too believe that Bitcoin can, and will, play a much bigger role in global finances. Bitcoin opens doors for individuals all over the world to build wealth and stability through a currency that doesn’t have boundaries. A currency which is not bound to a political party or controlled by dictatorships. A currency that is truly universal. If you own it, you have freedom.
The point I am trying to make is that if these questions that I am about to share are not resolved or are not widely understood. If these questions cannot be answered (easily) then Bitcoin will not reach global adoption. If Bitcoin isn’t adopted globally, it is pointless.
Shoutout to Natalie Brunell for her Twitter post which triggered an outpour contributors to this FAQ. Here are the common questions that people are asking:
What if the US bans it?… the US can ban any currency technically…so could they freeze your account?
Bitcoin is backed by nothing. Why would I trust it over a dollar?
What is Bitcoin backed by?
What is Bitcoin mining?
What happens when all 21 Million Bitcoin are mined?
What’s the actual purpose of Bitcoin? Is it a payment system? Store of value? Self-banking?
How is Bitcoin a hedge against inflation when the price can go down? Meanwhile inflation increases
Will the volatility ever go away?
Is there actually any difference between bitcoin and the other alt-coins?
How can I actually spend Bitcoin without it creating a tax nightmare?
Who created Bitcoin?
Is Bitcoin for criminals?
Two big objections I still get from non-bitcoiners are:
it’s not backed by anything and
it’s too volatile.
Why aren’t lost coins a problem?
What if I can’t afford a full coin?
How many BTC are actually out of circulation?
What happens when the last BTC is mined? What’s the incentive to keep mining? Vested interest?
How will the Bitcoin network sustain itself in the long run as the rewards diminish?
What caused the primary use case of bitcoin to pivot from a peer to peer payment system to a “store of value”?
How do wallets actually work? Where does the bitcoin "go" when you send it to cold storage?
What is Bitcoin (from non-digitally savvy and elderly folks)? "I feel like it's a Ponzi...”
How do we show people they need Bitcoin when it’s not so obvious?
All the coins are just code. Why is Bitcoin any better than the other coins? Why can't another coin overtake bitcoin?
What happens to bitcoin as it grows and paper bitcoin starts to be a large concern just as is the case with gold prices currently?
Isn’t inflation, technically, good for the economy? Why would we want to get rid of it?
What happens to network security when we mine the final block reward
Can your Bitcoin be hacked or stolen?
How do we get the “unbanked” to use Bitcoin, if they don’t have a bank?
Do you need a bank account to buy Bitcoin?
Again, these are all questions that common “non-bitcoin enthusiasts” are asking. Without these individuals feeling comfortable with the asset, it is hard to imagine a world where mass adoption takes place.
The solution may just be better education and more exposure to facts, as the majority of these questions have simple answers. That being said, these are topics that we should be discussing. Not talking about how “one day Bitcoin is going to take over the world” or “no doubt it will be worth $1M some day”. Again, these are just biased ideas that are more of a pipe dream than anything, especially if people are still asking these questions.
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