Bitcoin (₿) (ticker BTC)is an open-source cryptocurrency with a limited supply of only 21 million coins ever, keeping in mind that 1 BTC = 100,000,000 satoshi known as sats.
It is a decentralized cryptographic currency without a central bank or single administrator in control.
Transactions can be sent from user to user on the peer-to-peer bitcoin network without the need for a third person in between, like a bank, payment processor, or institution.
All transaction processing and verification are carried out collectively by the network.
Sound money: is money that is not prone to sudden appreciation or depreciation in purchasing power over the long term
Examples of sound money: gold
Fiat money: is a currency established as money, often by government regulation, that does not have intrinsic value. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.
In plane words, fiat money has no backing only trust in the government.
Example of fiat currency: USD, LBP, EU – all world paper money are fiat currencies
Purchasing power: is the amount of goods and services that can be purchased with a unit of currency.
This is a 10 min brief introduction to history of money; it will help you understand how fiat currency lost its gold backing.
Great article written by Robert Breedlove, it explains how money or fiat currency can be easily abused and leads to wealth theft
Great article written by Robert Breedlove, it explains how money or fiat currency can be easily abused and leads to wealth theft
Amazing article by Dan Held, the evolution of money and Bitcoin
Bullish case for Bitcoin by Vijay
The Bullish Case for Bitcoin (part 1 of 4)
A great article on what is Bitcoin backed with
Gradually Then Suddenly (#8): Bitcoin is Not Backed by Nothing
More material will be added to this document:
What Bitcoin Did -
The Beginner’s Guide to Bitcoin: What Bitcoin Did
صعود البيتكوين - Vijay Boyapati - بالعربي
أسباب صعود البيتكوين مقنعة ولكنها ليست واضحة. ينطوي الاستثمار في البيتكوين على مخاطر كبيرة ولكنه يحمل في طياته فرصة هائلة
- Fixed supply gives a proper measurement, a reference. As a ruler, 1cm is always 1cm; if you change that property, you will not change the object's physical state; you are just making a new reference number that creates instability.
- Decentralized, anyone can run it at home and be the audit (police) that enforces all the rules that the network runs by. Decentralization provides that this measuring tool is not played with by anyone. Many people mistake decentralization with AUTOMATION; just because something runs by itself does not mean it's decentralized.
- Trustless, there is no man in the middle to execute a change in ledger transaction. If I send you something, everyone sees the change and approves it; it's called triple-entry bookkeeping.
- Proof of Work ensures every "coin" minted is created with hard work, AND make sure no one can change anything because you will need immense work to do it for a short time; you lose more than gain. A system like Proof of Stake, for comparison, is known as interest rates, similar to what Riyad Salameh did giving Lebanese up to 15% interest, aka STAKING (freeze your money to give you money). Every coin is backed by energy, time, and human capital. Just as you go to work and earn money, it's unfair for anyone, including gov to be able to have free money.
- Open-source allows anyone and everyone to investigate the code running, and anyone can run that software by themselves.
- Difficulty adjustment makes sure the supply schedule of producing (minting/mining) is fixed and predictable, so even if you increase mining power, the schedule of the mined block will stay fixed,
- Permissionless, no one should prevent anyone from participating on the network (as a transactor, node, miner, etc.). This is a result of trust minimization, censorship resistance, and pseudonymity. Because of decentralization, no one can stop you. You do not need any permission from anyone to open a wallet and receive any transaction anytime, anywhere from anyone.
- Cryptographically secured, it does not mean decentralization or permissionless it represents ownership. A cryptographic system ensures that what you have access to is proven by code; for example, if you are buying a home and you get a deed, this deed is enforced by the gov; if that gov decides to see this deed invalid, you will not be able to claim it back.
All this combined create a monetary system of trustless, decentralized, self-owned, permissionless system aka Bitcoin. By these standards, no coin can match Bitcoin;
The difference between a hot (online) or cold (offline) wallet is simply whether your seed passphrases were created in an offline device that is not connected to the internet or online through applications such as mobile wallets or desktop wallets.
With an Online Hot wallet, there is always a possibility of malicious software spying on your devices such as laptop or mobile, or even a hot wallet provider being compromised by a malicious attacker, therefore, being able to steal your seed passphrases or even replacing BTC address aka injecting new bitcoin address when you are sending coins to another wallet or user.
Therefore it is highly recommended that the majority of your BTC that are being held as a store of value or if there is no immediate need and use of them be stored on a dedicated cold wallet.
Best types of wallets are open-source wallets, which means we know how they work on the inside.
Please Avoid: Coinbase and Blockchain wallets, many users lost their Bitcoin due to these hot wallets.
Best type of wallet is an Open-sourced one, a hot wallet is a type of wallet that runs on your computer or mobile device.
A Cold wallet looks like a USB device, but its not! It generates your seed offline and keeps it safe inside so no hacker can access it, but do not worry if you lose it as long as you have your seed then you can recover it anywhere anytime.
Most popular wallets are :
What is a non-custodial and custodial wallet?
A non-custodial wallet is a decentralized type of wallet where the customer owns its private keys. The user gets a file with private keys and needs to write down a mnemonic phrase with which they will restore their funds. Having private keys means that you have full control over the funds. Sounds good. Yes, but keep in mind, full control of your money also means that you are the only one responsible for your funds.
On the contrary, a custodial wallet is a digital wallet that keeps a customer’s private keys and provides backup and security for your assets. Yes, you read that right. Custodial keep users’ private keys on their side. Why do they do that, To control your money?
Custodial strive to provide users with the most convenient way to store crypto. Some people seek secure and customer-friendly solutions, giving them access to their assets at the touch of a button. And there are a few features exclusive to custodial wallets that may give them an advantage over non-custodial.
Example of custodial wallets:
Binance, Coinbase, Blockchain
any wallet that uses login/password is a custodial wallet, basically they are holding for you your Bitcoins.
Example of non-custodial wallet:
BlueWallet, BDR, Bitcoin.org , Hexa.
IT IS VERY IMPORTANT TO KEEP YOUR OWN KEYS, Therefore use only NON-CUSTODIAL wallets.
Here are few typical scam mgs:
“Pi is new bitcoin, or any other X coin“
“A new amazing great best investment“
“Start mining Bitcoin now , just send us xx initial investment“
“XX is a new digital currency being developed by a group of Stanford PhDs “
“Elon musk give away - Send us 0.1 BTC or other crypto to get 10x the amount, NOW“
“Apple Bitcoin Give away, watch now“ “200% gains with mining, just set up a node“
“This New amazing crypto will do 100x do not miss out like you did with Bitcoin“
“Download this X wallet and we will give you 5 BTC for free !“
“Better, faster , cheaper than Bitcoin”
”5000 BTC giveaway on YouTube or by famous person”
**ALL ARE SCAMS - IGNORE**
YOU HAVE BEEN WARNED
There at the moment of writing over 9000 projects and “coins” that emerged after Bitcoin, we refer to them politely as "shitcoins".
Many of them claim to be faster, better and more flexible than Bitcoin however the basic fundamentals of Bitcoin principle monetary policy is unprecedented and by now it is impossible to replicate its level of decentralization, it’s 106 EH/s hashrate which is comparable to 12 trillion Intel Core i7 running processors to match the current power of the Bitcoin network in addition to its social community strength.
I would HIGHLY advise against investing or getting dragged into any project that claims superiority.
We have single rule : if it says it's better than Bitcoin then its what we call “shitcoins” you will only get pulled in and lose your bitcoin/usd value causing a lot of pain and sadness.
Sit down, read, learn and be patient, you will not miss out on anything over night and if something is rising in price quickly most likely it will crash as fast.
We recommend you reading this:
Many users ask if Ethereum or other coins are the future, and the quick answer is NO.
All coins are centralized, and 99% of them were created out of thin air; in the example of ETH, over 70% of it was created on an excel sheet. Therefore no work was done in order to create a tangible value, but you might ask why it's then #2 on coin market cap? Easy, when you have free money, you can sponsor a lot of advertising to push your narrative in any way you want. Bitcoin has 0 marketing, yet it's globally recognized for its strength and solid-state.
Eth is not decentralized, and a central power can modify, upgrade, change and stop the chain as they wish most significant proof of that is a forced move to ETH2
Now since we got the short version of this, let me elaborate.
By the end of the day, it is a new class of an asset, the price is still in the discovery phase, and it could cause a lot of pain and sleepless nights if you invest more than you can chew to possibly lose.
No one can advise you what to do with your money and how to position them; however, I highly encourage you to read, educate yourself on money before investing in BTC.
Please ask more knowledgeable bitcoin users and double-check sources; once you feel confident enough that you understand this monetary system, you can try dipping your toes with small amounts and build your position from there.
Just stay away from quick gains schemes such as "online mining," "cloud mining," and anything that offers 100% returns in a short time; if it's too good to be true, then it's a scam.
The real strength is to HODL - Hold on for dear life.
On average, Bitcoin returned 200% per year, which means even if you are losing some USD value, just Hodl and you will eventually be okay.
That being said if you still want to trade, which is highly NOT ADVISABLE, an excellent exchange for doing so is Binance, which allows Lebanese to trade without issues.
Support us by using this link:
In Lebanon unfortunately we can not use our banking system to purchase bitcoin, no card works including Fresh USD account. You need international account
Therefore most common way to buy bitcoin in Lebanon is using P2P which is person to person exchange, this can be through an international website such as localbitcoins.com or hodlhodl.com , all you got to do is find a sell offer initiate transaction with seller , send him his payment using Wester Union or MoneyGram and once the seller receives payment your bitcoins will be released but make sure you use escrow service which ensures safety of your transaction therefore bitcoins you are buying are frozen for the seller and he can not retrieve them unless you fail to pay or run out of time window to pay.
Another p2p way is through local bitcoin communities such as BTC Market Place @lbbtcm on telegram , there are plenty of traders willing to exchange with you however always ask for the reputation of the seller inside a group and never respond to private messages unless it is a confirmed reliable trader just to avoid losing and being scammed.
Check out our How to Buy Section
- Address: A string of letters and numbers from which bitcoins can be sent to and from. A bitcoin address can be shared publicly. Like sending a message to an email address, a bitcoin address can be provided to others that wish to send you bitcoin.
- Bitcoin: The first global, decentralized currency.
- Bits: A sub-unit of one bitcoin. There are 1,000,000 bits in one bitcoin.
- Block: A collection of Bitcoin transactions that have occurred during a period (typically about 10 minutes). If the blockchain is thought of as a ledger book, a block is like one page from the book.
- Blockchain: The authoritative record of every Bitcoin transaction that has ever occurred.
- BTC: An abbreviation for the bitcoin currency.
- Centralized: Organized such that one or more parties are in control of a service.
- Cold Storage: The storage of Bitcoin private keys in any fashion that is disconnected from the internet. Typical cold storage includes USB drives, offline computers, or paper wallets.
- Cold Wallet: A Bitcoin wallet that is in cold storage (not connected to the internet).
- Confirmations: A bitcoin transaction is considered unconfirmed until it has been included in a block on the blockchain, at which point it has one confirmation. Each additional block is another confirmation. Coinbase requires three confirmations to consider a bitcoin transaction final and secure.
- Cryptocurrency: A type of currency that uses cryptography instead of a central bank to provide security and verify transactions. Bitcoin is the first cryptocurrency.
- Cryptography: In the context of Bitcoin, cryptography is the use of mathematics to secure information. Cryptography is used to create and secure wallets, sign transactions, and verify the blockchain.
Dollar cost averaging (DCA) is an investment strategy where a person invests a set amount of money over given time intervals, such as after every paycheck.
Investors choose this investment strategy when long term growth of an asset is foreseen, but a removal of short term volatility is desired.
- Decentralized: Without a central authority or controlling party. Bitcoin is a decentralized network since no company, government, or individual is in control of it.
- Encryption: The use of cryptography to encode a message such that only the intended recipient(s) can decode it. Bitcoin uses encryption to protect wallets from unauthorized access.
- Hash: 1) A unique identifier of a Bitcoin transaction. 2) A mathematical function that Bitcoin miners perform on blocks to make the network secure.
- Hot Wallet: A Bitcoin wallet that resides on a device that is connected to the internet. A wallet installed on a desktop computer or smartphone is usually a hot wallet.
- Immutable: If you cannot change it, it is immutable. Bitcoin transaction history (ledger) is unchangeable, so once the transaction is done, it will be displayed for the public forever.
- Ledger: A physical or electronic logbook containing a list of transactions and balances typically involving financial accounts. The Bitcoin blockchain is the first distributed, decentralized, public ledger.
- Lightning Network: This is a “Layer 2” payment protocol that operates on top of a blockchain-based cryptocurrency. It enables fast transactions between participating nodes and has been touted as a solution to the Bitcoin scalability problem.
- Miner: A computer or group of computers that add new transactions to blocks and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new bitcoins for their services.
- Node: A participant in the Bitcoin network. Nodes share a copy of the blockchain and relay new transactions to other nodes.`
- Open Source: Software whose code is made publicly available and that is free to distribute. Bitcoin is an open-source project and arguably the first open-source money.
- Paper Wallet: A type of cold storage wallet where private keys are printed on a piece of paper or another physical medium.
- Peer to Peer: A type of network where participants communicate directly with each other rather than through a centralized server. The Bitcoin network is a peer to peer.
- Private Key: A string of letters and numbers that can be used to spend bitcoins associated with a specific Bitcoin address.
- Proof of Work: A piece of data that requires a significant amount of computation to generate but requires a minimal amount of computation to be verified as being correct. Bitcoin uses proof of work to generate new blocks.
- Protocol: The official rules that dictate how participants on a network must communicate. Bitcoin’s protocol specifies how each node connects with the others, how many bitcoins will exist at any point in time and defines other aspects of the network.
- Public Key: A string of letters and numbers that is derived from a private key. A public key allows one to receive bitcoins.
- QR Code: A digital representation of a bitcoin public or private key that is easy to scan by digital cameras. QR codes are similar to barcodes found on physical products in that they are a machine-friendly way to embody a piece of data.
- Signature: A portion of a Bitcoin transaction that proves that the owner of the private key has approved the transaction.
- satoshi: The smallest divisible unit of one bitcoin. There are 100 million satoshis (8 decimal places) in one bitcoin. One satoshi = 0.0000001 bitcoins.
- Satoshi Nakamoto: The inventor of Bitcoin.
- SHA-256: The specific hash function used in the mining process to secure bitcoin transactions.
- Transaction: An entry in the blockchain that describes a transfer of bitcoins from address to another. Bitcoin transactions may contain several inputs and outputs.
- Transaction Fee: Also known as a “miner’s” fee, a transaction fee is an amount of bitcoin included in each transaction that is collected by miners. This is to encourage miners to add the transaction to a block. A typical bitcoin fee amount is 0.0001 BTC.
- Wallet: A collection of Bitcoin private keys used to spend bitcoins