Top 5 Reasons To Trust Bitcoin

A lot of newcomers to Bitcoin or those hearing about it for the first time ask the question “Why should I trust it? I don't know who created it, I don't know how it works, and I already trust my bank... so why bother?”

I’m here to break down the top 5 reasons you should trust Bitcoin.

1. Bitcoin is open-source.

This means that the code and rules governing Bitcoin are open on the internet to be publicly audited - so anybody that takes the time can read through to understand how it works. It also means that the creator of Bitcoin is completely irrelevant. Knowing who invented your car, airplane, television or your internet connection is inconsequential to that product actually functioning. Putting a name to the inventor does not make the protocol itself any more or less valuable... the technology holds up on its own to the scrutiny of technical eyes around the globe. An easy analogy is this: You may not know how your car works, but if you really wanted to you could open up the hood and learn.

2. Bitcoin is predictable and transparent.

How many US dollars currently exist at this very moment? What will the inflation rate of the US dollar be in the year 2020? How many US dollars will exist in the year 2140? How many counterfeit US dollars exist, or will ever exist?

If you're honest with yourself then your answers probably ranged from “nobody can be quite sure” to “that's impossible to know.” Now what if I asked the same questions of Bitcoin?

At the time of writing: 17,340,837 BTC in circulation. In the year 2020 the inflation rate of Bitcoin will be 1.73%, in the year 2140 there will be 21 million Bitcoins, and there are no counterfeit coins nor will there ever be. Due to the open-source consensus based model of the system, I can know these things with near certainty.

Let's contrast this with national currencies. How do you know when more dollars will be printed and devalue the ones sitting in your pocket? Well... you don't! Take for instance the United States during the financial crisis. 16 TRILLION dollars were created to bail out the banks. How do they project things like interest rates? Well some analysts have created software which will analyze speeches made by the chairman of the Federal Reserve and it will look at the language he/she uses. Based on her language and the word choice it will project how “dove-ish” or “hawk-ish” she is assign the speech a score reflecting the likelihood of a rate hike.

If I had sat you down and given you an overview of how these two systems function without telling you what they were, which one do you think would sound more reasonable and transparent?

3. Network Uptime and Resiliency

Since its launch in January 3rd of 2009 Bitcoin, has boasted a 99.99% uptime with no interruptions to the network other than two quick bug fixes to make protocol improvements. It can be argued whether or not the Bitcoin network was truly even offline during these upgrades. That means that over the decade there's been only a few hours of downtime. Meanwhile, Bitcoin itself has never been hacked. Contrast this with the regular bank outages and hacks that dot the headlines, and it's easy to see which is the more resilient network.

So why is this the case? It has to do with the philosophies of these networks. Banks work within what are called “walled gardens.” They try to keep everybody out and protect their databases by not exposing them to threats, whereas Bitcoin is out in the open. It is constantly open to and being attacked every moment of every day. At first this may sound counterintuitive, but you need to think of it in a specific way.

Imagine two children: One kid is kept in his room for much of his childhood. The room is sealed and everything is sanitized. He's never exposed to germs and disease. The other child sits in the driveway eating mud pies, high fiving friends with colds, and playing in the dirt. Flash forward 10 years. Both children come into contact with another sick child that has a common cold. Which one of these boys do you think is going to be less likely to catch the cold? My bed is on the boy with the mud pies.

This is the approach that the Bitcoin network has taken. By being open to attack on a regular basis, it becomes more resilient. It essentially builds up its immune system to these type of attacks. Now there's one important distinction I'd like to make here: Some of you may have heard of some high profile hacks of Bitcoin exchanges where a lot of people lost their money. Most notable of these would be Mt Gox. It's important to realize that these were not Bitcoin itself - these were the equivalent of Bitcoin banks. Mt Gox was a poorly managed Bitcoin bank, and when you place a lot of user’s funds into a large pool you are essentially painting a target on your back. and not only that have poor management. Lacklustre security by a centralized entity holding millions of dollars is nothing but a recipe for disaster.

4. Banks Are Untrustworthy

You don't need to look far into the headlines to see a lot of scandal surrounding banks. All over the world there were the irresponsible practices that led to the financial crisis of 2008. You can look at the rigging of the LIBOR rates, money laundering for Mexican drug cartels, Wells Fargo creating fake accounts for customers and charging them… I could go on. All in all, the industry does not exude trustworthiness. This of course doesn’t just apply to traditional banks - but to cryptocurrency banks as well. Entities like Coinbase, Bitfinex, Binance, Poloniex and many others all hold and control your funds when you utilize their services. To exacerbate problems further, many of these entities may not be subject to strict audits and regulations depending on the jurisdiction they reside in. The bottom line here is - centralized entities are a problem. If you’re not holding the money yourself, it’s not yours.

5. You shouldn’t trust Bitcoin

The current system of trust counterparty risk and centralized authority are the reason for a lot of the problems we have today. Bitcoin was built specifically to be openly scrutinized by the public. We need to stop trusting people and corporations because they're fallible. We need to start putting our trust in science, math, and peer review. So don't trust Bitcoin. Ask questions. Demand answers. Only when those questions are answered to your satisfaction - then you can trust YOURSELF.

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