How to get your Dad to buy Bitcoin ?

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Introduction

Once you enter the world of Bitcoin, you feel, as they often say in the field, ‘like falling down the rabbit hole,’ that you may have heard in a thousand podcasts, etc… Once inside, depending on the paths you follow, it’s not uncommon to start captivated by the shitcoins and promises of easy money, but when you’ve been in it longer, you spend hours studying it, etc… it’s hard not to be captivated by the potential of Bitcoin, once you understand it, even though it is common to give some concessions, or just trust some parts (we all delegate our trust to certain parties, I assume that most people haven’t compiled the software of their wallet, and reviewed every line of code).

The thing is, once you’re at that point, you find yourself wanting to share this excitement or knowledge with those closest to you, not to inflate the value of your holdings (unless you’re a cousin of an Arab sheikh, they’re not going to move the price), but because you truly believe in its transformative power for their financial future (they will remember you in the midst of a bull market, but it won’t be the right time either).

However… convincing them can be quite complicated, it’s a topic that most people simply aren’t interested in, and if you’re too pushy it can be counterproductive… So, given that in my case, there are people close to me whom I want to ‘orange-pill’, and it’s very difficult for me to synthesize all the arguments for the advantages of bitcoin, but I will try in this post to build the most common counterarguments to bitcoin (I’m convinced someone has done something similar before (but I want to show my own take on it). And also, to synthesize the most obvious arguments, let’s say, that point to bitcoin as an escape route from what is coming (assuming that these messages would be transmitted to people with very mainstream thinking, who watch TV, and read the newspaper).

I want to avoid in any case, that sensation of being a boring crypto bro evangelist, you can’t force anyone to move their money in one way or another, the goal is to transmit some of the knowledge that I may possess (in my case I have devoted many hours to it), in a synthetic way, so that ideas start to take shape, and at least the people who read this start asking themselves questions, or at least question how the current system works.

I have structured the thread into points in favor, and sub-sections of possible opposing versions.

After this introduction, let’s begin…

0. What is Bitcoin?

First, it’s necessary to explain what Bitcoin is. I’m going to opt for a simple explanation, but delving into the detail of mining, in case the interested person finds it odd that certain liberties are taken and the explanation is oversimplified:

Bitcoin is a form of digital money that exists on the internet. Imagine it as online money; instead of physically holding it in your hand (like cash), you store it in a digital wallet on your computer or phone. What makes Bitcoin special is that it’s not controlled by a government or a bank. Instead, it’s managed by a network of computers worldwide (called nodes, which can be servers, or mini-computers like a Raspberry Pi, which anyone can have at home with minimal power consumption). All computers run the same protocol, making it very difficult to change (you need to get enough people to agree, all with very different interests). This network validates the transactions that occur. Approximately every 10 minutes, a “block” is generated containing the transactions sent by the network users (it contains the maximum number of transactions possible in 4MB; the block originally was 1MB, but with SegWit, an update from 2017, it can go up to 4MB in practice, each transaction is ordered according to the fee each user is willing to pay). Once the block is validated, the next one begins to be filled, and each node dedicates itself to storing the entire record of blocks in history. It’s like an accounting ledger containing all network transactions in its history. As of today, it weighs about 650GB.

In this Bitcoin network, there are two key actors, miners, and nodes.

Nodes are simply computers connected to the Bitcoin network. Their main function is to validate and relay transactions and blocks on the network. Each node stores a complete copy of the Bitcoin blockchain, which is a public record of all transactions that have occurred on the network. Nodes verify the validity of transactions and blocks, ensuring they comply with the rules of the Bitcoin protocol.

Miners are special nodes (it may not be a full node and may be “pruned,” although I won’t go into that much detail) that compete to add new blocks to the Bitcoin blockchain. Their main function is to gather valid transactions, group them, and solve blocks to add them to the chain.

If you don’t want to delve into details here, skip to the bold paragraph. I put the following explanation in italics to differentiate.

To solve a block, first, it is created by filling it with the transactions of the users, and then the “hash” of the block must be calculated (I’ll skip that sometimes miners are said to “solve complex mathematical problems” as you read on some sites, because it’s very ambiguous, and incorrect)… And what is that hash? (something I’ll try to write in a simplified way to properly “orange-pill” people who are just getting into Bitcoin). The hash function is a fundamental concept in cryptography and in the case of Bitcoin, it’s essential for the mining process and network security. A hash function is a (mathematical) function that takes an input, which can be any type of data (in this case, a concatenation of numbers and letters), and produces a unique output of fixed length, called a “hash”. It also has specific properties: a given input will always produce the same hash output. This means that if the same information is input into the hash function, the same unique hash will always be generated (this is called a deterministic function). Although hashes appear random, they are deterministic and produce the same output for the same input. However, a small change in the input will produce a completely different hash, making hashes seemingly random and unique.

So, what does a miner do when solving a hash? Let’s imagine a previous block:

Previous block:

– Hash of the previous block: abc123

– Timestamp: 1637284650

– Nonce: 0

– Transactions: 1. Tx1: 10 BTC from A to B 2. Tx2: 5 BTC from C to D 3. Tx3: 3 BTC from E to F …

The miner creates the current block, concatenates all the data (pay attention to the nonce, which I’ve marked in bold):

Concatenated block data: abc123163728465010Tx1Tx2Tx3…

Then, the SHA-256 hash function is applied to the entire block:

Hash = SHA-256(abc123163728465010Tx1Tx2Tx3…)

The result is a unique 256-bit hash, which can be seen as a hexadecimal string of numbers and letters. For example, suppose the resulting hash starts with some zeros (just to get a realistic example, I will explain it afterwards):

Hash = 0000f1a2bc34d56789e…

Then the miner checks if the hash is valid, as there is another constraint, the difficulty adjustment, which I’ll explain now. The miner must check if the hash meets the difficulty requirements set by the Bitcoin network. If the hash does not meet the requirements, the miner adjusts the nonce (changes it) and repeats the process until finding a valid hash.

The nonce represents an arbitrary number that miners can repeatedly change in a block of transactions to try to find a valid hash that meets the difficulty requirements set by the network.

The nonce is one of the data included in the header of each block of transactions. Along with other data, such as the hash of the previous block, the timestamp, and the pending transactions, the nonce is used to calculate the hash of the entire block.

Since the hash function is deterministic and produces the same result for a given input, miners change the nonce in the block and recalculate the hash repeatedly until finding a hash that meets the difficulty requirements set by the network. This involves a trial-and-error process, adjusting the nonce and calculating the hash repeatedly until finding a hash that meets the requirements of the difficulty adjustment.

The concept of “difficulty adjustment” is related to how the difficulty is set to find a new block in the Bitcoin network. This process ensures that blocks are created approximately every 10 minutes, regardless of the total computing power of the network.

The difficulty is automatically adjusted by the Bitcoin network every 2016 blocks, approximately every two weeks. This adjustment is based on the average time it took to find the last 2016 blocks. If that time was longer than 10 minutes per block, the difficulty is reduced to make mining easier. If it was shorter, the difficulty is increased to make it more difficult.

Now, regarding the difficulty adjustment itself… how is it adjusted? The difficulty in Bitcoin is set in terms of the number of zeros required at the beginning of the hash of a valid block. This means that the resulting hash of a block must start with a specific number of zeros to be considered valid and accepted by the network.

At first glance, it might seem counterintuitive that more zeros make mining more difficult, as that would limit the number of possible valid hashes. However, it actually works the opposite way. Here’s the explanation:

More zeros, more difficult: When the hash of a block is required to start with more zeros, it means that the search space for possible valid hashes is significantly reduced. In other words, finding a valid hash that meets the difficulty requirements becomes more difficult because there are fewer possible hashes that meet those criteria.

Fewer zeros, easier: On the other hand, when the hash of a block is required to start with fewer zeros, the search space expands, making it more likely to find a valid hash. Although it may seem like there are more numbers to guess, there are actually more chances for a random hash to meet the difficulty requirements.

When the difficulty is high, more zeros are required at the beginning of the hash for the block to be valid. Therefore, finding a valid hash becomes more difficult, as I just mentioned. On the other hand, when the difficulty is low, fewer zeros are required at the beginning of the hash, making mining easier.

The zeros at the beginning of the hash act as a difficulty control mechanism. The more zeros required, the more difficult it is to find a valid hash, and vice versa. This difficulty adjustment ensures that the block production rate remains stable over time, thus maintaining the integrity and security of the Bitcoin network. (and if anyone asks, mathematically it could be possible not to find a valid hash with x zeros, but the probability is practically negligible, and it would be solved with the next difficulty adjustment, which ultimately balances the network according to the available computing power).

So, in our case, we would change the nonce and hash again, repeating until finding a hash with the necessary number of zeros:

Block:

– Hash of the previous block: abc123

– Timestamp: 1637284650

– Nonce: 1 (changed)

– Transactions: 1. Tx1: 10 BTC from A to B 2. Tx2: 5 BTC from C to D 3. Tx3: 3 BTC from E to F …

And we repeat:

Hash = SHA-256(abc123163728465011Tx1Tx2Tx3…)

The nonce is an unsigned integer that can take any value in the range of 0 to 4,294,967,295 (2^32 – 1) in Bitcoin. This range covers all 32-bit numbers since the nonce is typically stored in a 32-bit field in the header of a Bitcoin block.

When a miner is trying to solve a block, they adjust the nonce in the block header and repeatedly recalculate the hash of the entire block until finding a hash that meets the difficulty requirements set by the network. Since the nonce can take values in such a wide range, miners can make a large number of attempts to find a valid hash.

The simplest way to explain how to solve the block would be to roll a dice with many faces, and the one who gets the hash (result, in case of a dice) that meets the difficulty adjustment forms the block. The analogy would be as if millions of computers were rolling the dice at the same time. It’s not exactly like that, but it’s an analogy to make it understandable.

(As a curiosity, although irrelevant for “orange-pilling”, it’s important to note that a single hash attempt is not limited to changing only the nonce. Miners can also change other aspects of the block, such as the timestamp or transactions, in an effort to find a valid hash. This means that a miner can make many more hash attempts than just 4 billion.)

Once the block is mined, miners receive rewards in the form of new Bitcoins (there’s a “reward” for being the one to solve the block, the so-called “coinbase”, which is a fixed amount of Bitcoin), as well as transaction fees, for their work of securing and maintaining the network. The coinbase transaction is halved approximately every 4 years, which is known as “halving,” and involves a halving of the block mining reward (which also has consequences, as it reduces the Bitcoin “inflation” over time).

In conclusion, we can say that the competition among miners to add blocks to the blockchain is known as “mining” and is fundamental to the security and integrity of the Bitcoin network. The more miners participate in the network, the more secure it becomes, as it makes it harder for any individual or group to control the network or engage in malicious activities.

In summary, with Bitcoin, you can send money to anyone anywhere in the world quickly and securely, without the need for intermediaries like banks, thanks to the nodes and miners that support and secure the network. Additionally, as a finishing touch, there is a limit on the total amount of Bitcoin that can be created, making it scarce and valuable.

0.1 Why does Bitcoin have value? Isn’t it just hot air?

Following the last sentence, comes the classic counter-response, “What gives value to Bitcoin? (Isn’t it smoke, pure speculation, etc…?)”.

Regarding what gives value to Bitcoin, from my point of view, it’s the fact that it has generated a decentralized network of nodes distributed worldwide, allowing transactions to be made without intermediaries. This decentralization provides security against manipulation or centralized control by institutions or governments, which increases its reliability as a store of value. It’s an asset without counterparty risk; it’s not someone else’s debt. It can be used as a medium of exchange, store of value, or even as a unit of account in certain cases, perhaps in the Western world, where we don’t yet see value in these issues, but in countries with substantial currency depreciation, Bitcoin is an existing solution.

Over time, Bitcoin has gained greater acceptance and recognition both institutionally and among the general public. The increasing adoption by companies, investors, and individual users has contributed to its legitimacy and valuation. With the ETFs, doubts about the value of Bitcoin are dissipating, but there are still many people who consider it just hot air or a bubble.

Another important issue is the ability to monitor and verify the amounts of Bitcoin held in specific wallets. This is very useful if the owner of a wallet is known. For example, if we know that a wallet belongs to a bank or a government, we would be able to know at all times, and in any place, how much Bitcoin is in that wallet, and anyone could verify it. This is an obvious advantage over gold and central bank reserves.

Bitcoin offers several advantages over gold in terms of central bank reserve monitoring. Its digital and transparent nature allows for easy verification and real-time auditability of Bitcoin reserves, providing greater transparency and efficiency compared to physical gold storage (which has always been subject to rumors and doubts, from painted bars to empty vaults). Furthermore, Bitcoin is highly divisible, easily transferable, and offers advanced security against counterfeiting, making it an attractive option for diversifying and managing central bank reserves more efficiently and securely.

However, there’s always the doubt about “tangibility”; Bitcoin can’t be touched, and it’s true, it can’t be. Bitcoin has no tangible backing or governmental backing. Some critics argue that this makes it less reliable as a form of money or store of value in the long run, but with all that I’ve mentioned before, it’s questionable not to appreciate the value of the existence of such a network, which if imposed as a monetary base layer, would solve many problems of distrust between countries, or political and institutional transparency.

1. Buying Bitcoin to protect yourself against inflation

The fiat currencies are subject to constant erosion due to inflation, something that people who have lived in the western world in decades before the 2000s are well aware of. However, since the economic crisis in 2008, people have assimilated the idea that the fiat money (dolar/euro) is the base unit, and salaries from two decades ago do not differ significantly from those of now, compared to inflation (also thanks to reduced inflation, even deflation, in the past decade of the 2010s). During the last 2-3 years, people are starting to become aware of currency depreciation, but they are not really aware of the origin of this fact. The expansive monetary policy of central banks and the unrestrained printing of money have led to a constant depreciation of the purchasing power of fiat currencies, but until this happens for decades, and in an obvious way, as in Argentina, people are not really aware of it (some may even think it’s the evil businessmen who want to enrich themselves, or the speculators).

All this has actually been brewing for much longer, but the most obvious turning point is in 1971 when Nixon temporarily halted the dollar-gold convertibility, known as the “End of the Gold Standard”. Personally, I love this page regarding this.

The surprising thing is that there are still people today who believe that their money is backed by gold, so the first topic to introduce to the person you’re trying to “orange-pill” is the fact of debt-money that we have today. A simple way to explain this fact would be:

Before 1971, many national currencies, including the dollar, were backed by gold, which meant that governments and banks held gold reserves to back the value of their currency. This provided a way to stabilize exchange rates between different currencies and provided confidence in the stability of the financial system (in fact, as far as I know, the forex market was quite uninteresting back then, compared to what it is today).

However, in August 1971, U.S. President Richard Nixon unilaterally announced that the U.S. dollar would no longer be directly convertible into gold, ending the Bretton Woods system that had been in place since the end of World War II. This event marked the beginning of a fiat currency system, where the value of money was not backed by any tangible asset like gold but was based solely on trust and faith in the issuing government (or as some like to say, backed by petrodollars or aircraft carriers).

Since then, governments have had the ability to print money almost limitlessly, leading to a massive increase in the amount of money in circulation, which ultimately affects the population in the form of inflation. Furthermore, there has been a fundamental shift in the nature of money, which has gone from being a representation of tangible value to essentially being debt money, where most of the money in circulation is created through bank debt, loans, and credits. This debt money system has led to a significant increase in public and private debt, as well as economic cycles of boom and bust.

In contrast to all the above, Bitcoin has a limited and fixed supply of 21 million coins. This inherent scarcity protects users’ funds against devaluation caused by inflation, making it an attractive option for preserving value over time. And from here arise various arguments against Bitcoin (personally, I find them quite simplistic, but I’ll add them to be consistent with the post’s structure).

1.1 How do we know there are only 21 million Bitcoins, and if they decide to print more tomorrow, or change the code?

The total amount of Bitcoin that can be created is determined by the Bitcoin protocol and is programmed to be limited to 21 million units. In fact, as a curiosity, this limit is approached asymptotically; it’s not that there’s a variable that sets it.

This limitation was established from the beginning and is encoded in the Bitcoin software. The reason why this limit of 21 million was chosen is presumed to be based on the idea of creating a scarce and limited supply, similar to gold, to preserve its value in the long term, although we do not know what was in Satoshi’s mind (seeing the attempts of Bitgold by Szabo and company, this hypothesis would make sense).

In any case, it is possible to alter that limit; after all, it’s an open-source protocol, you can change the limit… but the problem is that the protocol runs on hundreds of thousands of nodes (computers, servers, raspberries running the protocol) distributed around the world, so if you want to change the code, you would have to convince the rest of the nodes to change it too. In case it doesn’t happen (which is highly likely), you would be running a Bitcoin fork alone; it would be a parallel chain in which no one would be interested in.

The Bitcoin system is decentralized (as I explained regarding the nodes, distributed worldwide, and anyone can have one at home for less than $100) and based on an open-source protocol, which means that any change in the protocol requires consensus among network participants. Changing the 21 million limit would require a software update that should be accepted by the majority of the network nodes and miners. Given the widespread support for Bitcoin scarcity and the decentralized nature of its network, making such a drastic change to the protocol would be extremely difficult and unlikely.

2. Financial Sovereignty and Confiscation Resistance:

The concept of financial sovereignty takes on a new meaning in the context of Bitcoin, thanks to its inherent nature. In a traditional system, asset custody and transaction execution are controlled by intermediaries such as banks or governments. However, with Bitcoin, individuals gain an unprecedented level of control over their own financial assets. You can create a bitcoin wallet, and when sending or receiving funds, they are confirmed by the consensus of the network, without a central entity (bank) validating such transaction. By eliminating the need for intermediaries, Bitcoin allows people to be their own banks, which means they have the ability to store, send, and receive funds autonomously, without the need for permission from third parties.

This financial autonomy has significant implications, especially in regions where trust in the traditional banking system is low or where capital restrictions exist. In these cases, Bitcoin offers a secure and accessible alternative for storing and transferring value, providing people with a way to protect themselves against asset confiscation by authoritarian governments or irresponsible monetary policies. Here, more than one may think that this is not a problem in the western world… but the fact is that it could be in the medium term, and you cannot protect yourself from something when it has already happened, action must be taken beforehand. Additionally, the ability to access Bitcoin globally and without geographic restrictions promotes financial inclusion and democratizes access to financial services.

Furthermore, another notable feature of Bitcoin is its resistance to confiscation by third parties. Traditionally, financial assets stored in bank accounts or custody by intermediaries are subject to the risk of confiscation by governments, financial institutions, or creditors. However, with Bitcoin, users have complete control over their funds and the private keys needed to access them (all assuming that we are “orange-pilling” the case of self-custody, although it may not be the initial step, it is something that needs to be emphasized, in my opinion). If you self-custody your keys, firstly, no one needs to know that you have created that wallet, nor that you control those keys, nor that the funds are yours (here I clarify that it depends, if you have bought bitcoin on an exchange that has asked for your data, it can be known that you have sent funds to a wallet, although it may not be yours).

Bitcoin transactions are recorded immutably on the blockchain and are irreversible once confirmed, meaning they cannot be reversed or altered by third parties (here, you can explain, without going into too much detail to avoid overwhelming, that the cost of mining a block is a lot of energy and money, undoing transactions in past blocks has an exponential cost, and in fact, past 6 blocks are usually considered immutable). In summary, Bitcoin offers users a secure and confiscation-resistant way to store and transfer value, protecting their assets from any unwanted external interference.

2.1 What if countries ban it?

Another common criticism is that Bitcoin will be banned. Those who put forward this argument usually have not used Bitcoin, or are not familiar enough with the protocol. Their theory is that a widespread ban on Bitcoin by several countries could discourage its adoption and use in those jurisdictions. Companies and individuals could face legal restrictions on owning, trading, or using Bitcoin, which could significantly reduce its utility and liquidity in those markets.

First of all, this is likely to happen, even surely will happen, as it did with the “Gold Reserve Act of 1934” in the United States, specifically the “Emergency Banking Act of 1933”. This law was enacted during the presidency of Franklin D. Roosevelt in response to the Great Depression and the banking crisis of the 1930s.

The Emergency Banking Act of 1933 prohibited private ownership of gold in coin, bullion, or gold certificates in the United States. The law required US citizens to surrender their gold to the government in exchange for compensation in dollars.

The issue with Bitcoin is that you can create a wallet without anyone knowing it, and operate in a circular economy, among people who have done the same (in a hypothetical case in which a higher percentage of the population knows how to use Bitcoin), and no one can discern the owners of these wallets, or associate them with real people, as long as they have bought P2P, or avoided giving their data as much as possible when purchasing for the first time (or using other methods for obfuscating them). It is true that every effort will be made to scrutinize and identify wallets, buyers, etc. Our political bureaucrats who govern us do not want anyone to slip through without complying, but it is still like trying to fence off a field, and such an overt attack could have the opposite effect, in addition to the collapse of the current fiat system itself, pushing people towards systems like Bitcoin (unfortunately, probably amid serious crises). This is one of the reasons why it is advisable to have at least some Bitcoin, as a counterbalance to a rapid degradation of the current system, which could happen in the coming decades.

In any case, effectively banning Bitcoin presents significant technical challenges due to its decentralized and censorship-resistant nature. Although governments may try to block access to cryptocurrency exchanges and websites related to Bitcoin, users could still access the Bitcoin network through privacy technologies and censorship evasion tools. Banning Bitcoin in some countries would not have a direct impact on the global Bitcoin network as a whole, as it remains a decentralized network that operates without a central point of control. The network could continue to function and serve users in countries where it is not prohibited.

Game theory offers an interesting framework for analyzing the dynamics between Bitcoin and countries considering its prohibition or adoption. In this context, some countries may see Bitcoin as a strategic opportunity to enhance their position in the global economic stage, using the threat of prohibition or active adoption as a bargaining tool.

On one hand, countries that take a pro-Bitcoin stance may see it as a way to strengthen their position in the global financial market and increase their economic influence. By embracing Bitcoin, these countries could attract investments in blockchain technology and fintech, foster financial innovation, and position themselves as leaders in the digital economy of the future (as is already happening with countries in the Middle East, or El Salvador, countries cannot afford to ban it so lightly, as others may seize a large part of the pie during these early stages).

On the other hand, countries considering the prohibition of Bitcoin may do so for various reasons, such as concerns about financial stability, combating money laundering and “terrorism financing,” or protecting the interests of traditional financial systems. However, banning Bitcoin may lead to unintended consequences, such as the flight of talent and capital to jurisdictions more friendly to Bitcoin (as is already happening, this is not something that will happen, this is the present).

In the context of game theory, the strategic interaction between Bitcoin and countries can be seen as a non-zero-sum game, where the actions of one player affect the options and outcomes of other players. Countries that adopt pro-Bitcoin policies can take advantage of competitive advantages and economic opportunities associated with the cryptocurrency, while those opting to ban it may face additional economic challenges and risks. Ultimately, the balance between the adoption and prohibition of Bitcoin will depend on the individual strategies and preferences of each country, as well as broader geopolitical and economic dynamics, but in any case, there are no incentives for global prohibition, I would even say there are incentives to acquire some Bitcoin as protection.

3. Mining, the Solution to the World’s Energy

Regarding mining, the mainstream opinion is that it is something “very bad that consumes a lot of energy and pollutes a lot”… When the reality, currently, because this is something that happens nowadays, is quite different.

Bitcoin and cryptocurrency mining have several advantages in terms of balancing energy consumption, acting as a buyer of last resort for energy, monetizing waste gas facilities (flare gas), and avoiding energy wastage. Bitcoin mining can help balance energy consumption by providing a constant demand for electricity (the computers that are mining, or rather ASICs, but for simplicity I’ll stick to “computers”, are continuously running calculating hashes). Since cryptocurrency mining is an activity that requires a large amount of energy, it can absorb excess energy during times of low demand (at night, for example, or when renewables provide more energy than the population absorbs) and help stabilize the power grid.

Cryptocurrency mining can act as a buyer of last resort for energy, especially in regions where there are surpluses of unused energy (there are many places where in times of abundant sun and wind, surplus energy that cannot be absorbed is wasted, and with Bitcoin, it could be absorbed and spent “on-site,” avoiding energy losses if that electricity had to be sold to a neighboring country, for example). This can be beneficial for energy producers by providing them with an additional market for their energy and avoiding the waste of energy resources.

In some oil and gas extraction areas, associated natural gas (flare gas) is burned as an unwanted byproduct due to the lack of infrastructure for its transportation and utilization. Bitcoin mining offers a cost-effective solution by allowing this gas to be used to generate electricity that is then used to power Bitcoin mining operations, turning a byproduct into a valuable resource.

In summary, Bitcoin mining can help avoid energy waste by using energy that would otherwise be discarded or not used efficiently. By harnessing renewable energy sources, unused energy surpluses, or underutilized energy resources, cryptocurrency mining can contribute to greater energy efficiency and reduce the waste of natural resources. It also allows electrical installations to be profitable in less time since you ensure a minimum, continuous demand, and makes projects viable that would not be otherwise. Bitcoin mining is profitable when energy is obtained at very cheap prices, less than 4 cents per kWh; it is not taking energy away from the population, optimizing the system and avoiding waste, thus improving efficiency.

3.1 Mining pollutes a lot, it’s going to ruin the planet, etc…

After the previous paragraph, I believe it’s justified to say that this stance is simply due to ignorance or insufficient research on the topic. Bitcoin mining can harness renewable energy sources such as solar, wind, or hydroelectric, which often experience fluctuations in energy generation. By utilizing this renewable energy for Bitcoin mining, a consistent outlet for energy that might otherwise go to waste during surplus periods can be provided.

In regions with underutilized electrical infrastructure, Bitcoin mining can tap into surplus capacity and enhance the efficiency of the electrical system by more fully utilizing available resources. This can reduce the need for costly investments in expanding electrical infrastructure and improve the profitability of existing assets.

This is a reality today, in the present, and news that goes against mining, in general, reflects a worrying lack of information (because any other alternative would be somewhat perverse, which I prefer not to mention).

4. An emerging technology… Are we still early?

Finally, there are people who think that the train has already left the station. Obviously, it was a better time to buy and get into the world a few years ago, but we are still far from widespread use. We will see a shift in mainstream opinion towards Bitcoin over the years, probably when they have secured a good portion of the pie, it’s your chance to secure a small part too.

It’s not too late to buy Bitcoin, as it remains an emerging technology with great long-term growth potential. Although the price of Bitcoin has experienced significant fluctuations in the past, its adoption and acceptance continue to expand worldwide. Bitcoin is a disruptive technology that is transforming the global financial and technological landscape. Its intrinsic scarcity, decentralized nature, and cryptographic security make it attractive as a store of value and a digital medium of exchange.

It is also true that there is not enough Bitcoin for everyone… Each Bitcoin is divisible into 100,000,000, or 100 million, satoshis, its smallest unit.

Calculating how many “sats” (satoshis, the smallest unit of Bitcoin) each person would get if everyone used Bitcoin involves making some rough estimates. Currently, there are around 6 billion adults in the world, and the total amount of Bitcoin that can be mined is 21 million.

If we evenly distribute all the available Bitcoin among all adult people, we would have:

Bitcoin per person = Total Bitcoin / Total people

Bitcoin per person = 21 million / 6,000,000,000

This would give us an extremely small amount of Bitcoin per person. To get a more manageable figure, we can convert this amount to satoshis, considering that there are 100,000,000 satoshis in one Bitcoin:

Sats per person = Bitcoin × 100,000,000 Sat / 6,000,000,000

This would give us the number of 300,000 satoshis per person if everyone used Bitcoin equitably. It’s important to note that this calculation is hypothetical and simplified, as the actual distribution of Bitcoin is far from equitable, and the widespread adoption of Bitcoin would have significant implications for the value and availability of the cryptocurrency. Taking into account the bitcoins that are lost, and the amount which is already owned by many people, we could even estimate that 100,000 sats would be a substantial figure in the future.

Transaction fees for simple transactions are not in that order of magnitude (we could talk about 1,000-5,000 sats per transaction), so in the case of widespread adoption, there might not be enough sats for everyone. Most likely, in my opinion, custodial solutions will be used, such as bitcoin banks, which hold the bitcoin of all users together, and you have an account with such a bank, and only move accounting entries between them, but the bulk of the bitcoin will end up in institutions, banks, governments, etc… We still have the opportunity to have bitcoin under custody, perhaps in a few years, it will not be possible.

It is true that if a hard fork occurs in the future, adding more decimals to bitcoin could be considered to handle more sats on the main chain, but these are all assumptions.

4.1 mySpace vs. Facebook

The opposite point to Bitcoin in this section is the analogy of mySpace, which was surpassed by Facebook, TikTok, etc… The analogy between Bitcoin and mySpace, suggesting that Bitcoin could be replaced by a better cryptocurrency in the future, is incorrect for several reasons.

Bitcoin is a pioneer; it was the first cryptocurrency and has proven to be extremely resilient and durable since its creation in 2009. It has overcome numerous technical, regulatory, and competitive challenges over the years, solidifying itself as a reliable store of value and a medium of digital exchange. Being the first and emerging “spontaneously” has made its decentralization and distribution natural. If a “definitive cryptocurrency” were to emerge today, there would be incentives to pre-mine it or have it hoarded by large companies, as they already attempt with many shitcoins. Bitcoin has that “commodity” aspect, which is impossible to replicate.

Although Bitcoin is the first cryptocurrency, its protocol is still subject to active development and continuous improvement. Enhancements such as the Lightning Network for faster and cheaper transactions, Taproot for increased privacy and scalability, and other layers like Liquid are being implemented. Bitcoin aims to be money, a secure and stable protocol. If you start adding gimmicks and changes, you compromise the long-term security of the protocol. Being money does not require complexity; it requires robustness, so seeking continuous changes and alternatives doesn’t make sense.

Bitcoin stands out for its robust decentralized network and cryptographic security. The Bitcoin network is the largest and most secure in the world in terms of computing power and community participation. This makes it extremely difficult to censor or manipulate, providing users with confidence and protection against external interference. The rest of the networks are far from such adoption or are controlled by protocols that depend on fiat money (proof of stake, in Ethereum), which is essentially a return of control to the owners of fiat money (central banks, institutions), under the guise that mining contaminates, which as we have seen is not the case (obviously, manufacturing computers pollutes, like any other industrial process, but it is allowing a new energy concept, opening up many fields that were simply not profitable before; globally, improvements in efficiency are clearly beneficial for the population).

Bitcoin’s launch in 2009 was completely open and decentralized, with mining available to anyone who wanted to participate from the beginning. There was no pre-mining in Bitcoin; that is, no blocks were mined before the software was publicly available.

On the other hand, Ethereum, for example (the example is analogous to many others that came after), was announced in 2014 and launched in 2015 through a token presale (Ethereum Ether) as a crowdfunding to finance its development. During this presale, large amounts of Ether were sold to investors and developers interested before the main network launch. This led to an initial supply of Ether distributed among those who participated in the presale, which is a form of pre-mining.

Bitcoin was primarily conceived as a decentralized digital currency and peer-to-peer payment system. It focused on scarcity and resistance to censorship, with an emphasis on fair and equitable coin distribution. Being money, or a store of value, reducing its complexity. Ethereum, on the other hand, was designed as a platform for smart contracts and decentralized applications (DApps). Its focus was on flexibility and programmability, which required a native token to pay transaction fees and ensure network security. It had many issues, hacks, the chain split with a hard fork… complexity and changes come with a cost. Those who want to secure their money do not want changes but stability.

I do not rule out that in the future, there may be cryptocurrencies with utility, but as a protocol to be money, the same conditions in which Bitcoin “was born” cannot be replicated, and given its adoption and network effect, I do not see the “mySpace” case feasible. There are and will be ways to enrich oneself with other cryptocurrencies or projects, but I do not see it possible for Bitcoin to be replaced by an alternative with the same functions since it is not possible to reproduce the conditions of “commodity” in which it was generated.

5. Governments are averse to unpopular decisions.

Another reason to buy Bitcoin is also inherent in the system we live in, where the incentives themselves only push Bitcoin’s price higher. The only way for it to decrease, in my opinion, is if governments and politicians were to start acting in favor of the citizens. If you don’t trust this to happen, as is my case, it further reinforces the bullish thesis for Bitcoin.

It’s a fact that with the debt-based monetary system we live in, countries are becoming increasingly indebted. When it comes to paying off these debts, there are several ways to “bleed” the population, although in my view, inflation is the preferred and most obvious method (which also pushes Bitcoin higher).

Governments may prefer inflation over raising taxes for several reasons, which are related to economic policy and political considerations. Raising taxes can be unpopular among voters and may result in a negative backlash against the government that implements it. On the other hand, inflation tends to be less visible and can be perceived as a more abstract phenomenon, allowing politicians to avoid direct responsibility and negative political repercussions.

Inflation can provide a way to reduce the government’s debt burden in real terms. When there is inflation, the real value of the debt decreases over time, as government tax revenues increase in nominal terms. This can be beneficial for governments facing high levels of public debt.

Raising taxes can have direct and indirect social costs, such as disincentivizing investment and economic activity, and generating resentment among taxpayers. Inflation, although it can have adverse effects, may be perceived as a less direct way to raise revenue for the government.

Inflation has negative effects on fiat currency, basically eroding the purchasing power of the currency, regressive wealth redistribution, and economic uncertainty. Furthermore, the fact that governments change every so often can lead to a lack of long-term accountability in managing inflation and other economic policies – every four years there is a change, predictably, and the problem is “the next one’s,” which means there is no incentive to do it right, and every day we are a little closer to collapse.

Bitcoin can be a lifeboat. You don’t need to be fully invested in it, but if someday you need it, not having anything at all is riskier.

5.1 The government looks after us

If at this stage of the game, someone thinks otherwise than the paragraph above, their level of lobotomization is such that they truly don’t deserve to reach Bitcoin; they will get it when the commercial bank forces it upon them in 2040, at 1 sat = 1 euro/dollar change rate.

6. Conclusion: How to get your Dad to buy Bitcoin? (or Mom)

Convincing someone to invest in Bitcoin, like your dad or mom, requires understanding his concerns and interests. Highlight its potential for high returns, its increasing adoption by institutions, and its role as a hedge against inflation, use the sections above to support your thesis. Emphasize the security measures in place and educate him about the technology behind it. Start with small investments to mitigate risk and offer to assist him with the process. Ultimately, approach the conversation with patience, respect, and a willingness to address his doubts or questions.