Forget everything you know about bitcoin. Forget everything you know about blockchain, and crypto, and finance. Once you begin this journey there’s no going back.
CEOs, politicians, millionaires, billionaires, presidents, academics, economists, computer scientists, engineers, athletes, and money nerds alike have all fallen down the bitcoin rabbit hole, and their stories are much like mine. Once you understand bitcoin in all its complexity, your life and your view of the world will change forever.
Be warned — there are more questions than answers ahead of you.
I knew about bitcoin for a very long time, but in hindsight I didn’t know anything. Knowing about bitcoin, and realizing what bitcoin is, are two completely different things. In bitcoin circles we call this phenomenon falling down the rabbit hole — the process of slowly realizing what bitcoin is and then spending months and hundreds of hours obsessively learning as much as you can.
My job is to make your fall down the rabbit hole as easy as possible. If you’re curious.
Even after a couple of years exploring what is bitcoin you'll find that you are still learning, you're still trying to understand what it is. Part of the reason for that is because bitcoin is a really new technology, it's a really disruptive technology, but it's also an abstraction on a technology that is really old. That technology is money.
— Andreas Antonopoulos
The Elephant in the Room
Your journey down the rabbit hole begins with a deceptively simple question — What is bitcoin?
It’s a question everyone asks but no one seems to have a good answer for. John Oliver, host of Last Week Tonight, said it best: “Bitcoin is everything you don’t understand about computers combined with everything you don’t understand about money.”
Usually, the nerds will give you the technical definition: “Bitcoin is an open monetary transmission protocol.” They’ll tell you what it does and how it works, but I heard these jargon-filled definitions repeated for years and they never helped me. In fact they all made bitcoin seem boring and underwhelming. It’s a totally new invention, a revolutionary invention, and yet it’s shrouded in complex terminologies and elitist jargon.
The only things we have to explain what bitcoin is are analogies of already existing technologies, but like the old saying goes — some analogies are helpful, but all are wrong.
My personal favorite analogy for explaining bitcoin goes like this: Imagine there’s this huge elephant, and a group of blind monks all walk up to it and start feeling it to try and make sense of it. One monk is petting its head, another is on its back feeling its ridged spine, there’s a monk clinging to one of its tusks, and another is rubbing its toes. The elephant of course is bitcoin in this analogy — there are so many different pieces, it’s impossible for any one of us blind monks to get a full sense of it.
What makes it even more difficult is that there is no good elevator pitch for bitcoin. It truly depends on where you’re coming from, your prerequisite knowledge, and personal values. Explaining to the monk touching the elephant’s tusks what the toes feel like is a lost cause.
My job is to lead you little monks all around the elephant, feeling all the parts to get a sense of something totally new. This requires a bit of commitment, but I promise you will find it very rewarding if you stick around.
The Simple Answers
So what is bitcoin?
Bitcoin is the first and most popular cryptocurrency. It is the invention of digital scarcity, a new form of money and an independent global monetary network. It was invented by a person or persons under the pseudonym Satoshi Nakamoto, and represents a breakthrough in computer science and cryptographic systems.
In simple terms, bitcoin is digital money. But then again, so are dollars, euros, and yen. We have PayPal, Venmo, Cash App, credit card reward points — you can even send money over Facebook Messenger. So while “digital money” is technically correct, it doesn’t really tell us anything.
What about digital gold? I’m sure you’ve heard that term tossed around, and honestly I like it a lot better. If I was explaining bitcoin to a five-year-old, I would say that bitcoin is just gold that’s on the internet. In the same way that email is just internet mail, bitcoins are gold coins on the internet.
I like this comparison because calling bitcoin digital gold tells you it’s one of a kind, rare, and desirable. It’s an evolution of gold — where gold is great at moving value across time, it’s not great at moving value across space. Bitcoin was specifically designed to fix all of the issues with gold, including verifiability and divisibility.
But still this definition is underwhelming. It’s extremely simplified and doesn’t really explain why it’s revolutionary. To steal a line from Andreas Antonopoulos — saying bitcoin is digital gold is like saying the internet is a fancy telephone.
The Great Excel Spreadsheet in the Sky
Another analogy I like to use is “the great excel spreadsheet in the sky.” Think of bitcoin like the ultimate Google Doc — a shared spreadsheet in the cloud which is just a list of transactions. That’s literally all bitcoin is. It’s just a ledger, a list of who sent money to who.
When we’re talking about digital dollars or Zuckerberg bucks, the money ledger is stored on a central server. Basically the bank has a private computer that they keep all the records of everyone’s money. The big difference is that Bitcoin’s ledger is a decentralized server. It’s hosted on tens of thousands of computers across the globe. Every bitcoin computer has a full copy of the bitcoin blockchain, for a fully transparent system. Bitcoin’s ledger is everywhere — it’s in the cloud.
It’s the great excel spreadsheet in the sky.
If you’re having trouble putting an image of bitcoin in your head, just think of a long digital spreadsheet — a calculator that keeps track of everyone’s money. When someone makes a bitcoin transaction, every computer in the network updates their ledger. So when people say “bitcoin isn’t real,” it’s the same as saying your money in the bank isn’t real. Except of course the bitcoin ledger is the most powerful and secure supercomputer on earth, can’t be hacked or shut down, and you have full autonomy over your savings.
Now let’s spice up the metaphor a bit. Bitcoin is digital gold, right? So instead of the excel sheet in the sky, think of it more like a golden tablet in the clouds. This is some Moses shit. Carved into the enormous golden tablet is a list of all of the bitcoin in the world — who sent it to who and who owns it now.
Once you send bitcoin to someone, a new line is magically carved into the tablet and it stays there forever. Anyone can see this golden tablet — it’s open and transparent and visible to all — but no one can undo transactions once they’re carved. No one can actually touch this tablet and no one can change the rules. It exists beyond the clutches of humanity.
We’ve created something we can’t stop.
The Trust Machine
Ok, that’s all well and good, but this great excel spreadsheet in the sky — why is that revolutionary?
Bitcoin is revolutionary because it is a trust machine. Bitcoin manufactures trust because there are no humans that run it or rule over it. Instead, you are trusting in math, physics, code, and probabilities.
Bitcoin’s trust is based on a globally decentralized network of tens of thousands of computers that maintain the integrity of the system. Transactions are recorded on an immutable ledger — a record that can’t be changed or destroyed and is constantly being audited. It’s kind of like putting a calculator in charge of a global financial and monetary system. A calculator that can’t be hacked and whose code is fully transparent, leading to a fully trustworthy and fully rules-based economic system.
This is trust in math, trust in code, not in humans.
Unlike today’s currency which is maintained by banks, corporations, and governments, bitcoin is open source software — a monetary system that runs on top of the internet. This is an automated justice system programmed into software, software that’s incorruptible, secure, and eternal. Software that no human can change.
You can trust the golden tablet because it’s not controlled by humans. You can trust the trust machine because it exists beyond trust.
Bitcoin is a system for electronic transactions without relying on trust.
— Satoshi Nakamoto
More Than Money
You’re going to hate this, but bitcoin is actually more than one thing. It’s a currency and a network. It’s a payment tool — like Visa, Venmo, or PayPal. It’s an internet protocol and a technology stack. It’s not just a money — it’s a global monetary system.
Bitcoin is like an unstoppable PayPal, beaming digital super-gold around the world at the speed of light. It allows you to send and receive value, to and from anyone in the world, with nothing more than a smartphone and an internet connection. The software operates on its own. There’s no customer service you can call, no corporation that can change the rules, and no government that can stop your payments.
Bitcoin is a global network of tens of thousands of computers running the same free open-source software. It’s a peer-to-peer network where every computer can communicate with any other computer directly. There’s no central server processing all of the data — every computer is participating. It’s kind of like a big mushroom, there’s not really a brain, it’s all just one big blob. Or you could think of bitcoin as the brain itself, with electricity pulsing throughout the network.
It’s not money for the internet — it’s the internet of money.
The internet is programmable information. It’s unrestricted, global, instantly transferable information. Bitcoin is programmable money. It’s unrestricted, global, and instantly transferable money. The internet is a protocol that can be built upon. Bitcoin is a money that can be built upon.
Bitcoin is the first completely global, completely borderless, completely decentralized, completely open form of money. One where you can build applications because it is programmable. One where you don’t need permission to launch an application. Where there are no gatekeepers or barriers to entry.
And there will only ever be 0 bitcoin. Not one more.
The Bigger Picture
Still, all of these definitions are a bit underwhelming. Bitcoin can be compared to so many things, but if you really dig into the third and fourth order effects — what happens when this thing gets just a little bit bigger — it becomes obvious that bitcoin is something far more profound.
Bitcoin being compared to digital gold is an understatement and really what it is is digital monetary nuclear weapons, because if you really dig into the third and the fourth order game theoretic effects that are likely to arise when this thing gets just a little bit bigger, which to me it inevitably will, there is just so much that it is going to cause and reorganize in this world.
— Murad Mahmudov
Bitcoin is the Manhattan project for human freedom in the digital age.
It’s an enormous, globally coordinated research and development initiative. An open-source software project aimed at building an unstoppable internet-native monetary system. A tech stack which implements fair, neutral money and protects human rights for 8 billion people. Fighting back against authoritarianism and the encroachment of a digital surveillance state.
The entire point of bitcoin is to remove the distribution, production, and control over money from humanity. And the corruption that comes with it. Bitcoin is the separation of money and state.
Bitcoin removes humans from the control over money. It replaces a system that is manipulated, debased, and untrustworthy with one that you can trust. A system where the rules can’t be changed to benefit the rich and powerful. A system where no matter how much bitcoin you have, you can’t alter the tablet.
THAT is monetary revolution.
Down the Rabbit Hole
I want to be upfront with you — I was skeptical about bitcoin for many years, even after deeply understanding it. If you’re skeptical too, that’s good. It means you are a rational thinker and don’t just blindly accept things as they are, which is an integral part of bitcoin and a foundational value of all bitcoiners.
We have a saying in bitcoin: don’t trust, verify. I don’t want you to trust what I’m telling you. I want you to be inspired to learn more and discover your own truth.
It took me hundreds of hours to understand bitcoin, hundreds more just addressing my questions, and another few hundred after that trying to find the catch. I want to break it all down so you can understand in a fraction of the time.
It might take 5-10 years of ignoring it and multiple exposures before you realize. All I ask is that you remember me as the bitcoin guy and come to me with questions when you need bitcoin for yourself and your family.
Bitcoin doesn’t need you, but it’ll be there when you need bitcoin.
Your journey down the rabbit hole has just begun.