Contrary to common misconceptions surrounding bitcoin, it’s not some shady, anonymous underground money laundering protocol. Despite that being repeated by politicians year after year, the fact is that bitcoin is the most open, transparent, fair, and resilient monetary network created in the history of the world.
The implications for a world operating on an open, transparent ledger to conduct trade are massive, not just economically, but psychologically too.
Let’s take a look at all the ways that bitcoin demonstrates its transparency to ensure that no one is unfairly censored or discriminated against.
Bitcoin Is Open Source
Since bitcoin is open-source technology, developers all around the world have freely taken advantage of the code to build new products for bitcoiners to protect their privacy and uphold their financial sovereignty.
- First and foremost, bitcoin’s open-source code means that you can start up and run a Bitcoin node yourself from anywhere in the world.
- You can CoinJoin your bitcoin with Sparrow Wallet and other open-source platforms to obfuscate the true owner of specific UTXOs.
- Sparrow Wallet also helps you consolidate your UTXOs, thus optimizing your Bitcoin stack for high-fee environments in the future.
- For the more user-friendly experience, new fun Bitcoin games, social media networks, and more are popping up everyday to help you stack sats with Lightning and take full advantage of what bitcoin offers.
- Of course, plenty of Bitcoin-only wallets exist to support the foundation of all of this; Take self custody of your bitcoin first before anything else.
Importantly, because bitcoin is open source, anyone is free to fork the code. If there’s something you don’t like about bitcoin, you can use the code to create your own. The only problem is that you may have a hard time getting others to adopt it.
The beauty of bitcoin is in its decentralization: Anyone can use it however they please, but no one can arbitrarily change the code for the rest of the network without achieving consensus from the network. So despite the fact that bitcoin is completely open to everyone in the world, putting its inner workings on a bright display for hackers and bad actors to try and attack, bitcoin is infinitely more secure than our legacy centralized monetary networks, which are prone to and incentivized to be manipulated over time.
Bitcoin Is Open To See
Contrary to the closed ledgers that central banks facilitate, bitcoin’s ledger is completely transparent and open for anyone to see it and review it themselves.
Not only does this instill a greater sense of trust between users, but it also helps keep bitcoin secure. By having an open look into each and every transaction entering the mempool, it makes it easier for network participants to spot and cast out double spends or other malicious transactions.
- You can use the blockchain to verify where exactly a particular stack of bitcoin exists. Does it belong to you, in your own self custody, or is it packaged as an IOU and stored behind the closed ledger of Blackrock (and co.)?
- Even though Lightning provides a new layer of privacy for bitcoiners, the main chain steps in as a “court system” of sorts to verify that the balances of each party in a set of transactions are accurate and reflect the true value of each party’s exchange.
- Despite the transparency of the main chain, however, you can choose to obfuscate your identity from transactions with some technical understanding.
Transparency also helps to keep larger authorities in check.
If businesses enter a transparent financial relationship with its customers using bitcoin, anyone would be able to verify on-chain the movement of money throughout the blockchain. “Proof of Reserves” is the general concept put forth by many bitcoiners.
And after countless cases of fraud due to insufficient backing hiding behind closed doors, ensuring that companies have the money they say they do is of utmost importance to creating healthier relationships between businesses and their customers.
While it doesn’t sound very privacy-centric, the beauty of bitcoin is in its flexibility. Individual users can choose to optimize their Bitcoin stack for privacy as much as they’d like, whereas businesses may choose to enter legally-binding contracts that publicize their Bitcoin wallet addresses.
The market for each industry will ultimately decide how much transparency customers require, but the important note is that bitcoin is a major force in pushing for a higher level of trust from companies and financial institutions.
Bitcoin Is Open To Competition
First and foremost, bitcoin has no feelings at all. It’s a protocol. It merely exists, and contrary to the belief that bitcoin still needs to prove its dominance as a store of value, other historic stores of value actually carry the burden of proof to demonstrate why what they offer is more valuable than what bitcoin has shown to do.
While bitcoin has a lot of “competitors” trying to maintain their seat on the throne as a “safe-haven” asset from monetary inflation, what bitcoin revealed to the world is that all these assets today suffer from a critical point of potential failure: counterparty risk.
Combining the fact that bitcoin has no counterparty risk along with a fixed supply, then assuming it’s a sound product that people have a demand for like other financial assets, then the competitive landscape becomes fairly clear:
- So, instead of trying to set up the 1.7 billion unbanked people around the world with banks and legacy financial infrastructure, they are skipping the banks altogether and using bitcoin as the foundation for their finances.
- Bitcoin isn’t some monopolistic force, either. Contrary to the infinite money printer, Bitcoin mining is actually designed to become less profitable over time. This force embraces competition and incentivizes miners to seek out the most efficient forms of energy, thus creating a cleaner, more abundant economic environment as compared to a system that actively pushes against nature to create infinite fiat money out of thin air.
- Of course, powers that be have no interest in letting bitcoin undermine their own financial assets. Thus, the war of bitcoin is heating up, and political leaders are doing whatever they can to try and contain bitcoin’s freedom from spreading too far, such as banning self custody, suppressing bitcoin mining, and introducing “alternatives” to bitcoin that rob you of your financial sovereignty.
- To help push bitcoin beyond the competition, it needs adoption. Thankfully, there are plenty of tools to orange pill your friends and family and educate them on why bitcoin is useful to their lives. If bitcoin’s growth over the past decade tells us anything, it’s that people are waking up to the problem that bitcoin is solving, and it’s bitcoiners like you and I sharing these tools with others that drive adoption around the world.
Finally, it’s critical to understand that bitcoin is not like the rest of the cryptocurrency space. Bitcoin rose to prominence naturally from an outcry of collective angst against financial manipulation and the 2008 Great Financial Crisis. On the other hand, every other cryptocurrency created since was born out of an attempt to ride the momentum of this new technology, thus enriching the creators along the way.
Bitcoin has no competition because it has no leader; No one trying to single-handedly change bitcoin to “outcompete” other cryptocurrencies. It’s an organic, decentralized network of participants upholding its integrity and enforcing the rules of the network.
Meanwhile, the second largest cryptocurrency, Ethereum, disenfranchised miners from profitability based on the creator’s desire to fork Ethereum to a proof-of-stake system. The monetary policy shifted based on the whims of its creator’s lobbying, and displaced those who didn’t align with its new monetary regime.
And the unfortunate reality is that that’s how most, if not all, of other cryptocurrencies function. They have a foundation. They have a “founder”. They have a dedicated team of engineers, writing code to fulfill the expectations of their token holders.
They all have counterparty risk. And if they truly don’t, then they don’t have the network effects of bitcoin, and thus people have no incentive to move to the other monetary network, as it inherently carries more uncertainty than the more widely-adopted one.
That’s why the first-mover’s advantage is critical, and why bitcoin has no real competition facing it.
Bitcoin Is Open To Anyone
Finally, bitcoin is open to anyone, but it’s not necessarily for everyone.
Those in power whose goals are to retain their authority have no incentive to use bitcoin. It actively undermines their motivations in life. On the other hand, bitcoin is here to serve anyone who is suffering from the drain of currency debasement looking for a safe haven solution. It’s for those who don’t wish to accumulate power, but wish to preserve their life’s work and pass it down to their descendents.
- Anyone can participate in the Bitcoin circular economy. Buying it, holding it, and spending it among other bitcoiners, creating a parallel economy that works entirely separate from the legacy financial system. That’s what bitcoin needs to succeed.
- You don’t just have to buy bitcoin though. Anyone can spin up a mining rig and generate bitcoin themselves if they put in the work to set it up. Or, you can choose to accept bitcoin instead of fiat for your business and earn non-KYC bitcoin that can’t be censored or audited.
- Fully-offline protocols built on bitcoin let you spend your bitcoin without an internet connection, which demonstrates just how powerful “freedom money” can be for anyone that needs it.
- Small nations all around the world are adopting bitcoin more rapidly than the first-world economic powerhouses, thus demonstrating how bitcoin is truly a technology for the common man rather than gated communities.
Because bitcoin is open to the world, it’s incredibly accessible. All you need is a compatible device to send and receive bitcoin. Whether that be a dedicated hardware wallet, a hot wallet, a smartphone, desktop, tablet, or even a Nokia – you can use bitcoin with just about anything.
Since bitcoin is so accessible, the small fish are taking advantage of it first and creating leverage for themselves to compete in the future. Just take a look at El Salvador, Argentina, Vietnam, and other small countries who have hopped on the Bitcoin train early. Bitcoin isn’t an “investment” for these communities – it’s a necessary safety net from their eroding purchasing power.
Final Thoughts
Many try to muddy the waters of bitcoin and make it seem more complicated than it really is, but that couldn’t be further from the truth.
Bitcoin is certainly new technology that’s foreign to our traditional mindsets revolving around money. But that doesn’t mean that it’s difficult to use. With a good friend (or the internet) and maybe an hour of time, you can learn the basics of bitcoin and get set up with a wallet and some bitcoin of your own to store on it.
It all starts with generating your seed phrase securely, writing it down properly, storing it safely, and ensuring your backup works properly.
These four simple steps are all it takes to unlock true financial sovereignty for you, your friends, and your family, and start living with money that truly belongs to you, rather than the banks.
Bitcoin’s simplicity is a testament to how all of finance should be: simple.
Saving money shouldn’t be complicated, but large economic authorities have used their power to create a lot of friction in this process and make you overthink, create a complex portfolio of investment vehicles to diversify in, all the while making you more dependent on them to “protect” you and your wealth by shrinking its purchasing power.
Bitcoin removes the need for all of that, and thus frees up your time to focus on what really matters in life. So take advantage of it. Use bitcoin’s open-source technology, share it with others, and help usher in hyperbitcoinization for the world.
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