Why Bitcoin is So Complicated

“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, … we can’t take it violently … all we can do is by some sly roundabout way introduce something that they can’t stop.” — F.A. Hayek 1984

Bitcoin came into existence in 2009 in a very complicated world. That world was already built on a shaky foundation made up of extremely complicated entities and processes. It was a world of central banks, organizations that aren’t private but also aren’t public. It was a world containing over a quadrillion dollars of very complex derivative financial instruments whose extreme price volatility had lead to multiple economic crises. It was a world where banks needed multiple “bailouts” to save them from collapse.

Despite the clear weaknesses in this system, as Hayek observed in the quote above, those in charge of this system were not about to let go of their control of money — and they had the tanks, drones, jet fighters and aircraft carriers. To become good money, Bitcoin had to be Hayek’s “sly, roundabout way … that they can’t stop.”

Which brings us here. Bitcoin is the first digital monetary network that could not be stopped, taken over or broken by adversaries such as governments, competitors, hackers, banks, or anyone else for that matter.

In this complicated world, Bitcoin needed to be a system whose leaders could not be threatened or bribed. So it opted to have no leaders. In fact, it opted to leave out every part of an organization that could possibly be compromised. This made Bitcoin unlike anything we’ve seen before. Bitcoin replaced all these corruptible features with incorruptible mathematical functions and rules based on the laws of physics. Neither math nor the laws of physics can be stopped or overcome by man-made laws, by force or by deception. This is how Bitcoin defends itself from threats and attacks by governments, hackers and other opponents. It is the only way. (Bitcoin is actually not therefore sly since it uses no deception.)

Bitcoin seems complicated to many of us because we haven’t studied the mathematical discoveries it utilizes or how it puts them together to fulfil the requirements of a good money. However, our computers are also very complicated and few of us understand how they work. The same goes for even our automobiles, refrigerators, and the Internet we rely on. But we know those things work — most of the time at least. Bitcoin also doesn’t break down.

If you want good money for yourself, choose bitcoin. You don’t have to understand everything about it, but it is entirely open and transparent so if you want to you can. Why should you want a good money in the first place? Learning that is also a somewhat complicated journey, but a good start is understanding that a healthy, sustainable civilization requires it.

Want more? This entire series (plus a 26th bonus article) is available as a pdf or kindle ebook at https://swanbitcoin.com/whybitcoin.

This is article #20 of the Why Bitcoin Series

Here’s #21:

Destroying the lies that imprison people