Schemas of Bitcoin
I was five or maybe six-years-old when I begun to understand what money means. First we had Finnish markka and Estonian kroons. Then we had euros and kroons, and later only euros. I remember as a little kid thinking myself why the world does not have money that everybody would use: a global money. Well now there is. It is called .
Edits: blog structure fixed, cover art removed, strike throughs added, and rabbit holes modified.¹
What exactly is this about? Bitcoin is a network and bitcoin is money. Whereas the Internet is an information highway, Bitcoin is the highway of money. Instead of
myriad blogs, cat videos and memes social media, video streaming and whatnot, Bitcoin is a place to build programs that deal with money and value.
With Bitcoin, one can send billions of euros worth of value effortlessly and lightning fast.² You can transact value between Finland and Antarctica provided you have a smartphone with internet connection.
In the current system this is not possible, or at least not without hefty costs. This is because banks do not share the same ledger, and updating the ledger takes time and trust. With Bitcoin sending money is frictionless since there is no third-party between you and me.
Ergo, there is no “Bitcoin company” that would be responsible for the network and its users. You are.
Bitcoin has potential. Although, for Bitcoin to become a global phenomenon, it should be easy to use without much hassle. At the moment, this is not yet possible.
First, not everyone has the time to learn all the intricacies of the Bitcoin protocol. Second, some people do not even have the interest to learn the beautiful yet hard interdisciplinary aspect of Bitcoin.
However, lack of time and interest should not be a barrier for a smooth and widespread use of bitcoin. For example, a large majority of people do not know, or to be frank, are not even interested in knowing how the Internet works. The most important thing is that it works.
Many other things may be more important than a thorough understanding of Bitcoin. This is understandable.
Bitcoin requires knowledge in programming, mathematics, cryptography, game theory and economics; would you be ready to learn it all? Maybe if you were a Bitcoin developer but not as a common-or-garden user.
Be that as it may, even as an ordinary user we still need to be aware of what Bitcoin actually is. Otherwise we are in danger to fall into swindle (especially when talking about money).
Bitcoin gives you great power, and with great power comes great responsibility.
Bitcoin has been described in many ways from many perspectives. These different approaches can be explained with schemas.² Schemas are mental models of the world, of situations and of everything in between. All of us have schemas.
In social sciences, these mental models are said to organize knowledge, guide cognitive processes and behavior. New knowledge is processed according to how it fits to the pertaining schema.³
When we rely on our schemas, sometimes we are like the “blind men who describe the elephant”: We believe something to be true and argue for it based on our limited personal experiences. Rarely do we try to see the whole picture before our conclusions. We form opinions based on incomplete knowledge.
This is why we have different narratives on Bitcoin. As we try to understand and explain the new and weird attributes of Bitcoin, we try to assimilate them to the existing schemas.
Even the mysterious inventor, Satoshi Nakamoto, did not have a clue as to what to compare Bitcoin to:⁴
Sorry to be a wet blanket. Writing a description for this thing for general audiences is bloody hard. There's nothing to relate it to.
There simply is not a thing that would akin to Bitcoin. Bitcoin requires you to build a whole new schema.
I have collected a catalogue of varying descriptions of Bitcoin. For each description there are certain conditions and context for it to be accurate. (Kind of like everything in life.) Some descriptions are more true than others. However, each description needs time to understand where it stems from.
If one description sounds insignificant for you, the other person might shout eureka. Bitcoin means different things to different people in different parts of the world.
I believe Bitcoin represents a new beginning.
- is a global ledger
- is the most secure money
- is a social and cultural paradigm shift
- is an investment
- is a political statement
- is a piggy-bank
- is hard money
- is a store of value, a medium of exchange, and a unit of account
- is a human right
- is money that is founded on open-source code
- is cheap and quick to use
- is a system with rules without a ruler
- is your own Swiss bank
- is the internet of money for the internet
- is an economic singularity
- is a peaceful revolution
- is easy to transport
- is the most scarcest money in the world
- is digital gold
- is an idea that was thought impossible
- is dead
- is mere speculation
- is a pyramid/ponzi scheme
- is rat poison squared
- is a get-rich-scheme
- is waste of energy
- is for terrorists, pornographers, pedophiles and tax avoiders
- is electronic cash
- is cash in the way that its transaction is irreversible once settled
- is an alternative to status quo
- is a way to communicate value freely
- is money that does not discriminate on nationality, age, or economic status
- is something that exists which doesn't actually exist
- is a symbol for anti-consumerism
- is money that cannot be confiscated or censored
- is open 24/7 (cf. bank's business hours)
- is a decentralized network
- is a decentralized clock
- is money that does not require permission to use
- is money that does not ask for ID
- is money that cannot be counterfeited
- is money that cannot be debased
- is money that has a built-in, predictable monetary policy
- is a mathematically backed money (vs. money that is backed by faith on the government)
- is money that gives you financial sovereignty
- is a safe-haven
- is a protection against Orwellian future
- is a protection against inflation
- is a protection against cashless society
- is a separation of money and state (just like state and church once)
- is money that has made micro-transactions possible (Lightning Network)
- is programmable money
- is money that has made transparent clearing possible
- is money that represents libertarian viewpoint
- is the next step in the evolution of money
- is a rabbit hole
- is the red pill from Matrix
- is the future of money
- is a new beginning
Warning: Bitcoin is a rabbit hole. You may never come back once you fall. Build your own schema from Jameson Lopp's page. He is a Bitcoin advocate. He updates his page constantly.
Alternatively, take a look at my GitHub page where I uploaded my bookmarks that I have collected over the years. The texts and videos are sorted alphabetically based on literacy.
 Reason: blog's initial structure was too thick for readers, cover art did not fit the theme of the essay, and rabbit hole is now more easier to access.  https://lightning.network/  https://www.britannica.com/science/schema-cognitive  The term “mining” is used in Bitcoin terminology to describe the process of securing the network where a reward is earned if a solution is found. In reality, there is no “mining” going on in Bitcoin; it just fits the existing schema of a miner (who secures the network) that finds gold (block reward).  https://bitcointalk.org/index.php?topic=234.msg1976#msg1976