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Everything You Need To Know About Bitcoin – James Altucher

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Sat, 05 Mar 2022 08:30:26 +0000harvestmoonfriends

Right here’s the issue: Most individuals who know quite a bit about Bitcoin can solely communicate “tech.”

I used to be at a convention not too long ago. I used to be the keynote speaker however had zero discuss ready (as typical). It was a crowdfunding convention so I “crowdsourced” my discuss.

I requested the viewers: I can speak about entrepreneurship or I can take quarter-hour to elucidate Bitcoin with out utilizing any technical jargon. Clap for which one you need.

Nearly 100% of the individuals needed to study Bitcoin with out the technical jargon.

Individuals are hungry for this. They don’t wish to hear about “crypto” or “blockchain.” They simply wish to know what all this Bitcoin stuff is about.

Again in 2013, I assumed Bitcoin was a rip-off. I used to be flawed.

First, some credentials.

In early 2013 I had my doubts. I began studying the whole lot I may. Then I bought my fingers soiled.

I’ve been a coder / programmer since 1985. I made a decision to code up a Bitcoin solely retailer (possibly the primary ever) and promote my ebook, “Select Your self” on it earlier than it was launched on Amazon.

It was very exhausting. I needed to develop the shop from scratch since there have been no straightforward instruments to assist me. There nonetheless isn’t (trace: enterprise alternative).

As soon as I launched it, fairly a couple of individuals purchased my ebook. I bought a PDF of my ebook for 0.1 Bitcoin. Bitcoin was then $60 so I bought it for about $6 per PDF. Proper now, it’s as if I bought every PDF for $1,600. I bought many copies.

I went on CNBC once they heard I used to be doing this. The anchor requested me, “Did you simply do that for publicity?

Screen Shot 2018 01 07 at 2.11.59 PM

I stated, “Properly, I’m on nationwide TV so I suppose it labored.”

One other factor price noting — most of my prospects got here from one area title (they needed to submit their e-mail addresses for me to course of the sale): nftgamef.com. Make of that what you’ll.

A couple of months in the past I began writing about cryptocurrencies once more. I noticed so many individuals getting concerned in scams, I needed to assist.

The opposite day I had an Uber driver who thanked me throughout the automotive trip for serving to him “get it.”

And final evening at a restaurant, the waiter on the finish of the meal shook my hand and thanked me for serving to him “lastly” start to grasp what Bitcoin was about.

To ensure that crypto currencies to succeed, individuals want to grasp at a primary stage what they’re. No one must study difficult cryptography or blockchain.

Simply perceive why now. Why that is essential for us a society.


Simply perceive these two causes. Then you’ll know the potential for Bitcoin. And you may be well-liked at cocktail events.


Each new model of cash solves the main issues of the final model of cash.


If I’ve a bag of rice and I would like sneakers, what if you happen to make sneakers however you solely want 1/2 bag of rice. Do I get 1/2 a pair of sneakers?

Barter has a variety of issues. Within the above, arising with the rice to sneakers trade fee is tough.

Then arising with 1000s of trade charges simply to exit and purchase groceries is nearly inconceivable.

PLUS, what if you need to transfer (your kingdom is attacked). How are you going to hold all that rice? All of these sneakers?

Cash has two functions:

  • as a retailer of wealth / financial savings
  • to make transactions

There’s a 3rd, which Ray Dalio, the pinnacle of the most important hedge fund on this planet, Brigewater, advised me the opposite day. However we’ll get to that later.

Barter is horrible as a retailer of wealth. And for transactions, finest case it’s very tough.

However issues result in alternatives. Which ends up in…


Gold and silver are scarce. It’s exhausting to mine them.

But it surely’s exhausting to forge them as a result of you’ll be able to measure by weight.

So the shortage mixed with the shortage of forgery makes them good selections for cash. I can convert my rice into gold cash, you’ll be able to convert your sneakers into gold cash, and now we are able to commerce and now we are able to purchase no matter we wish.

As a retailer of wealth, it’s not nice however not horrible.

If my kingdom is attacked and I’ve to maneuver, gold and silver are simply saved and carried as designed jewellery.

BUT, two issues.

One: what if you happen to stay in a rustic that doesn’t have any gold mines. Now you both need to commerce for gold or begin attacking nations: (this didn’t work out so properly for the Aztecs).

Two: What if you happen to needed to purchase a home proper now: are you actually going to carry a truck of gold bars to the closing? Or if you need to transfer to a different nation and you’ve got a lifetime price of financial savings: are you going to ship your entire gold bars to your new residence?

Folks say that gold is “actual” versus (later) paper cash and cryptocurrencies.

This isn’t actually true. Gold is a rock. But it surely does have industrial makes use of (silver is healthier for this due to worth however nonetheless…). Gold and silver are nice electrical conductors, can be utilized as SILVERware. Can be utilized as antibiotics (therefore nice for fillings on enamel).

So we are able to say that gold cash is “backed” by one thing that has actual use with worth related to it.

However we nonetheless have to resolve the issues above.


Nations made paper cash that was like a contract with the federal government that each one of that cash could be transformed into gold.

This was nice for transactions (straightforward to hold paper cash).

This was nice for retailer of wealth (put the cash in a financial institution and you may go anyplace). The primary banks for paper cash backed by gold helped fund each warfare in Europe within the 1800s. Good job!

When paper cash is backed by gold it additionally places a clamp on inflation. You solely have as a lot paper cash in a rustic as there may be gold in that nation.

So you’ll be able to belief the federal government to not go loopy printing cash that isn’t backed by gold (like German within the Nineteen Twenties when trillions of Marks had been printed and Germany went into an inflationary demise spiral that was no less than one trigger for World Battle II).

BUT, why profit the nations the place gold is straightforward to mine and punish the nations the place gold is tough to mine.

Additionally, the world is increasing in each means: extra individuals, extra expertise, extra innovation, extra THINGS.

I’m undecided this can be a good factor or a foul factor (see: Germany above) however typically nations have to stability debt with cash printing to handle their fiscal coverage.

The US went off of gold within the early 70s with a purpose to fund the monetary wants of each the Vietnam Battle and the social enchancment applications of Lyndon Johnson.

This created inflation.

Paper cash will typically result in this example. Somebody will say: why do we’d like the gold half?

Once more, is likely to be good or dangerous. There’s a variety of debate. Did cash printing save the US in 2008 and 2009? Possibly. Or will there be future issues brought on by this? Possibly.

However, there are different issues with paper cash that have to be solved:

a. No privateness.

If I’m making a large (higher than $1000) transaction I’m often not utilizing money however both a bank card or a cash wire.

So which means your financial institution is aware of. Different banks know (the financial institution you’re sending cash to, the Federal Reserve, the native Reserve financial institution, and so on).

Authorities companies know (the IRS, the NSA, and so on and so on).

Doubtlessly websites like Google and Amazon know relying on what cost companies you utilize and what you’re shopping for.

So you haven’t any privateness in your transactions with paper cash.

b. Charges.

If I ship a pal in Korea cash, I am going by my financial institution (charge), native reserve financial institution (charge), Federal Reserve (charge), Worldwide wiring system (charge), their central financial institution (charge), their native reserve financial institution (charge), their native financial institution (charge).

That’s a variety of charges. These charges assist create inflation as a result of each transaction must have a revenue on prime of these charges.

c. Forgery. One thing like $200 billion in solid cash is circulating proper now.

d. Human error. This can be a CRITICAL drawback. There are such a lot of alternatives for human error. While you switch cash, they’ll ship to the flawed account. Or a financial institution’s software program could be hacked and also you lose your entire cash.

Or, most significantly, the Federal Reserve within the US can resolve to print one other trillion (Like 2009) and, with out your permission, the worth of your greenback has gone down.

Within the US we’ve been fortunate. However all of South America hasn’t been so fortunate (all of their currencies crashed within the 80s. Most of Asia wasn’t so fortunate within the 90s (their currencies wiped them out). Russia in 1997 was worn out.

Many nations have relied on people to print (or not print) cash and the slightest human error can wipe out a complete nation’s financial system.

America has been fortunate. For now. However this can be a HUGE error we danger on daily basis.

These are the essential issues. There are extra (theft, for example).

e. What’s backing paper cash?

Solely our belief. I don’t wish to be a conspiracy theorist. However the actuality is: a greenback is a chunk of paper. Similar to gold is only a rock.

How do they make us belief that the cash has worth?

They put “In God We Belief” on it. They put George Washington. They put the signature of the Secretary of Treasury (pretending it’s a contract.).

And, for the weirdos, they even put a pyramid with an eye fixed on it.

And that’s purported to be why we belief it. I don’t belief it.

4) BITCOIN (and, btw, Bitcoin just isn’t the tip. There can be a “5”).

Bitcoin solves the issues above.

a. Human error: there isn’t any printing of cash. There’s a fastened provide of 21,000,000 cash.

How do I do know this? I’m a skeptic. So I learn the software program behind Bitcoin. I learn it again and again till I may determine it out. In a single a part of the code they clearly outline what number of cash could be “mined” / printed (printed is the flawed phrase however I’m utilizing it right here to make the reference to paper cash). And there’s one other a part of the code which “enforces” the primary half.

b. Theft. Like with each different type of forex, an trade (like a financial institution) that shops your Bitcoin could be hacked and cash stolen.

BUT, I solely preserve a small amount of cash in an trade. You may get a storage drive, retailer your cash, and put it in a security deposit field. So even when the trade is attacked, you continue to have your cash.

ALL theft could be prevented this manner with Bitcoin. You’ll be able to’t do that with paper {dollars} as a result of you probably have too many {dollars}, how will you retailer it? Ditto for gold.

c. Forgery. The software program ensures that Bitcoins can’t be solid.

d. Privateness. I can ship you a Bitcoin and no person is aware of who’s sending it, who’s receiving it, and no authorities establishments know it.

e. Charges.

Some bitcoin transactions have small charges. But it surely’s nothing just like the charges of going by six banks within the transaction described above.

What’s backing it?

There’s about 1000 man-years of science backing Bitcoin.

The underlying expertise of Bitcoin which includes heavy quantities of cryptography, monetary know-how, and fundamentals of contract legislation, plus the “blockchain” have 100s of use-cases that we’ve got solely simply begun to play with.

EVEN IF Bitcoin is rarely used as a coin (though word: it’s getting used on daily basis as cash) there are 100s or 1000s of different makes use of for Bitcoin that don’t have anything to do with the essential cash use.

I gained’t get into the weeds right here: however suffice to say that ALL of contract legislation could be (and can be) ultimately changed by Bitcoin.

And ALL of logistics can be changed by Bitcoin (e.g. UPS is changing all of their inside logistics (monitoring tens of millions of packages on daily basis going from tens of millions of areas to tens of millions of different areas) by Bitcoin expertise.

There’s nothing behind paper cash or gold like this.

Now…Bitcoin has issues additionally.

Therefore the necessity for different cryptocurrencies. However that’s okay and never the subject for right here. Suffice to say, Bitcoin solves all the essential issues of paper cash, which solves the issues of gold, which solves the issues of barter.

HOWEVER, there may be another excuse why Bitcoin is right here to remain and it’s so compelling.



All the pieces in life evolves. Not solely species however concepts.

Let’s take a look at some industries.


Theism: 500 years in the past if you happen to bought sick, you’d both pray to a god to get higher, go to a shaman, make a sacrifice, or assume you dedicated a sin that made you sick and would attempt to undo the sin.

Humanism: Publish-rennaissance, we had human “consultants” known as docs who would both leech us to demise, carry out horrible surgical procedures that may kill us, or would pat us on the again, hammer our knee and say, “take two aspirin”.

Docs aren’t dangerous. They’ve saved many many lives. However Humanism has it’s limits. A recognized truth is that, on common, the second when a physician is best is his or her first 12 months out of medical college. After that, statistically downhill.

Dataism: Now when if you happen to go to a physician, you get assessments. You get blood work, you get an MRI, an EEG, an X-Ray, the X-Ray may go right into a database and an AI algorithm matches it in opposition to different X-rays (does it match a tumor X-ray or a non-tumor X-ray?). We even get genetic testing to see if our sickness is in our chromosomes.

Then, armed with knowledge, typically a pc will inform us the right answer (and even a pc can do the robotic surgical procedure wanted), or a human will assist interpret the info (however there’s room for human error right here).

So Medication has developed from

Theism → Humanism → Dataism

Let’s decide one other business:


Theism: 3000 years in the past if two nations went to warfare, the kings would carry out large sacrifices to their gods the day earlier than.

Within the Bible, whosever God was stronger (Baal versus Yahweh being a notable Hebrew battle), that group would win the warfare.

Fragments of this exist proper now: Could the Drive Be With You, stated to Luke earlier than he flies out to struggle the Demise Star.

Humanism: For the previous 500 years, whoever had essentially the most people on the bottom, essentially the most bullets, then essentially the most planes, then essentially the most bombs. ,would win the warfare.

Dataism: Battle is being fought on daily basis now. EVERY SINGLE DAY. On daily basis, some nation tries to carry down the electrical grid of Poland.

On daily basis, each Fortune 500 firm is attacked by “bot armies” coming from…no person is aware of.

I’ve been concerned within the cyber safety house for 25 years or extra.

I as soon as was speaking to an organization who helps Fortune 500 corporations struggle “bot armies”. All the workers had been prime Phds who had been the consultants of their fields.

One man advised me, “Irrespective of how good we’re, they’re smarter.”

Who’re “they?” The individuals making the bot armies. The place do they arrive from? We don’t know. They arrive from all over the place. They’re simply smarter than us.

Elections are rigged. Firms are attacked. Info is stolen.

We’ve been in World Battle III for no less than 20 years and it’ll by no means finish. Dataism has taken over warfare.



Theism: “In God We Belief”

Humanism: “George Washington”. An image of Independence Corridor. Or the White Home. Something. Something in any respect in order that we belief people with what we’re given in trade for the exhausting labor we do each single day.

Will we belief people? I are inclined to belief people. However that’s possibly not so good all the time. People make a variety of errors and that’s been the downfall of so many corporations, so many households, and so many…the whole lot.

Dataism: Bitcoin and now different cryptocurrencies.

1000s of man-years of science. 100,000s of traces of code that has been checked by 10,000s of the very best programmers.

Knowledge-ism prevents forgery, retains privateness, re-creates all contract legislation, avoids charges, avoids theft. And that is only a small pattern of what knowledge does for cash.

“In Knowledge We Belief” for higher or worse. But it surely works.

The pure evolution of cash has arrived. And it’s not solely Bitcoin however different cryptocurrencies.


Why do we’d like different cryptocurrencies?

Why do we’d like a couple of forex in any respect? Why is there a US greenback and a Canadian greenback.

FOR NO REASON. Simply a man-made border created in 1770 and we’ve got two totally different currencies.

Cryptocurrencies have what I name are “drawback borders”.

One coin is healthier than Bitcoin for making contracts (Ethereum).

One other coin is healthier for privateness ((Zcash. An issue with Bitcoin is that though there are not any names on a transaction, I can see the dimensions and the time. So privateness remains to be a slight drawback).

One other coin is likely to be higher for fixing an issue of decentralized storage (versus storing your entire images on one centralizes spot that may be hacked like Google Drive). Bitcoin doesn’t tackle this drawback.

Drawback Borders create new currencies.

Is it too late to put money into Bitcoin and different cryptocurrencies?

Proper now, this jogs my memory of the Web in 1995-6. There’s a little bit of irrational exuberance in new cash. Costs are going loopy.

There can be a large pullback. BUT, the authentic cash are right here to remain and can preserve going.

Amazon, after all, pulled again, when the Web pulled again. Now it’ll ultimately be a trillion greenback firm. Many corporations that began within the 90s have survived and thrived and had been nice long-term investments which have paid off.

Cryptocurrencies are the “web of cash.” The web is right here to remain and so is the web of cash.

We’re solely in inning one of many cryptocurrency shift in our cash.

Will cryptocurrencies change paper cash?

Sure. Ultimately. It won’t be Bitcoin though Bitcoin will all the time exist.

However every nation, to resolve the issues of paper cash, will ultimately change. Nations which are debating it embody: Israel, Estonia, Venezuela, Argentina.

Nations that can use some elements of cryptocurrency expertise of their central financial institution will quickly embody China, Korea, Russia, and sure, the USA.

And lots of nations will reject cryptocurrencies however their inhabitants will shift en masse to cryptocurrencies with a purpose to keep away from corruption, human error, theft, and so on. First on my record for that is Argentina.

What’s going to the worth of cryptocurrencies be?

After I first wrote about this, all cryptocurrencies added up was about $200 BILLION. Now it’s round $750 Billion. Though I do view lots of the currencies as scams so the quantity is actually much less.

That’s the “SUPPLY” of cryptocurrencies.

The DEMAND is the quantity of paper cash + gold that exists.

That quantity is $200 TRILLION.

So with a purpose to go from ONE TRILLION to 200 TRILLION that’s a 200x acquire. In different phrases, $10,000 turns into $2,000,000.

And if you happen to give attention to the authentic currencies, the beneficial properties are a lot higher.

So, once more, we’re very a lot at first of this. There isn’t any different funding alternative in our lifetime higher than this. And we ARE at first.

What are the authentic cryptocurrencies?

There are a lot of. I don’t wish to get into the weeds right here and talk about all of the expertise.

And I additionally don’t like all of the speculative buying and selling that is occurring in cryptocurrencies. Hypothesis results in scams and bubbles.

However similar to there have been Web corporations that survived the bust and have become the businesses we use on daily basis, there are cryptocurrencies that exist now that we’ll use on daily basis ten years from now.

You stated on CNBC that Bitcoin will go to a $1,000,000? Have been you kidding?


Bitcoin hit $20,000 not too long ago. We simply stated it may go no less than as a lot as 200x increased. That’s $4,000,000. So even at $1,000,000, Bitcoin can be a purchase.

How else can one earn a living within the Bitcoin sector?

You don’t need to be a software program developer.

When the gold rush hit within the 1800s, Levis Denims grew to become the large winner. And the businesses that bought “picks” and “shovels”.

There can be many picks and shovels corporations within the Bitcoin house.

Websites which have the most recent bitcoin information and evaluation will do properly. Exchanges will do properly. Firms that assist combine conventional corporations with the deeper elements of Bitcoin expertise will do properly (like whoever helps UPS combine blockchain tech into their logistics).

Firms that assist new cryptocurrencies launch will do properly.

And on and on.

Somebody stated you known as “Bitcoin is a Ponzi scheme” in early 2013. Why ought to we belief you now?

First, I’m all the time a believer that the very best funding is in your self. This can present higher than 200x returns.

That stated, I used to be flawed in early 2013.

I’ve been a software program man for 25+ years. I’m in a position to do my analysis. Which I did.

By Could 2013 I had already achieved sufficient analysis to construct my very own bitcoin retailer, go on CNBC and talk about Bitcoin, and be an advocate when it was simply $60. That is all public information.

However, for me, specializing in my bodily well being, emotional well being, artistic well being, and religious well being, will all the time be essentially the most worthwhile “Foreign money” I can develop and commerce in.

Might Bitcoin be only a fad?


Paper cash DOES have the issues described above. Somebody has to resolve these issues. Bitcoin and different cryptocurrencies resolve them.

And each business evolves. Cryptocurrencies are the “In Knowledge We Belief” means during which cash is evolving.

And $750 BILLION believes in me on this.

Who’s Satoshi?

Satoshi is the secretive founding father of Bitcoin. He’s price many many billions in Bitcoin proper now. He’s nameless and reporters, governments, and so on have by no means discovered who he’s.

That stated, various individuals know who he’s. I learn his weblog on daily basis, He’s a secretive individual and no person desires to blow his cowl.

Properly, what ought to I do now?

Don’t take heed to me.

a. Get an account on Coinbase (or wherever). Purchase $10 price of Bitcoin simply to style and really feel it.

b. Then learn. Learn quite a bit.

Right here’s some books not about Bitcoin which are price studying:

Sapiens by Yuval Hurari

The Evolution of All the pieces by Matt Ridley

The Ascent of Cash by Niall Ferguson.

Antifragile by Nassim Taleb

There’s a variety of dialogue of cryptocurrencies on Reddit and Twitter. DO NOT learn these. Most of these discussions are stuffed with trolls though there are some first rate sources there.

Blogs / Websites: begin with Coindesk and CoinTelegraph. You’ll discover the remaining as you learn extra.

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