JustAndrewBTC

bitcoin

How Does Bitcoin Work

@JustAndrewBTC's bio

Haha thanks, worked with some salty old timers. Great content from the older generation 

The History of Digital Money

Were you able to read without paywall? 

Wasn’t sure how the link would transfer over. If everything’s working fine, more articles to follow daily. Cheers!

Here’s a series of writings from a true bitcoiner through and through. Reading these the last few years has opened my eyes to what’s going on financially. Enjoy.



Time moves one way, forward. Utilize the time you have today to better your life tomorrow. Everyone has a clock and that clock keeps ticking until their last breath. Some longer, some shorter.

As a kid, everyday felt like the longest day of your life. Being home before the street lights came on was the single most important event. Spending the days riding bikes, playing tag, swimming, sports etc without a care in the world, consumed you. Life was never better. Life was never slower.

You’ve grown up now, and times never felt faster. The kiddos are growing like weeds. You wake up feeling a little more achey than the last. You’re getting older. Losing friends and family becomes more common. Days blend together into weeks, months, and years. It starts to feel as if there isn’t enough time.

Technology has streamlined every aspect of life today. This writing for example would have been written on paper, signed, sealed, delivered by mail. Our money is inevitably going through this very change. From Rai stones to tobacco, tobacco to gold, gold to fiat, and fiat to credit. We are watching right before our eyes the change from fiat to bitcoin. Sending monetary value at the speed of light across the world. However, having a money which wastes no time sending and receiving has coincidentally brought us back in time. Hear me out.

We are seeing a surge in farmers markets and the old barter system. The use of homemade lotions, tallow, cooking products. Eggs, beef, locally sourced vegetables for sats. The type of products that took time and effort to make with far better quality than we see at big box stores today. Being able to transact in a permission-less monetary network we are bringing back the old time values and beliefs into the modern world. Value for value.

One could hope we see the beautiful architecture we once saw lining the streets of churches, buildings, old town halls make a comeback. With a money from the future that requires proof of work to create, comes products and a way of life from the past that last and are made with quality in mind. 

Our grandparents would be proud. 


Back from the future

Opinions are like assholes. Everyone has one, some just stink more than others.

I’ve never been a writer, but always loved to read. I am an above average father with a passion for learning and teaching.

If the thoughts I share can get through to one person, I can justify sharing them.


bitcoin_beginners

What do I do now?

I agree with you whole heartedly. He isn’t quite there yet, and his SO is against it. So in his mind if it isn’t purchased from somewhere that violates our 4th amendment, it “isn’t official.” Just a good start for now, robosats will be another discussion. Thanks for reading!

Thank you. It’s the exact text I just sent to a real good friend, minus some personal details. 

I tried putting this into the easiest way to understand it all. It’s a ton of info. Whether you believe it or not, or don’t understand it yet, owning bitcoin today is going to be worth exponentially more in 10-15 years. Life changing money, and you won’t need much either. Especially if we have a true currency collapse.

I’m not going to get too technical on the proper wording of what everything is, but I’ll get you to a point you can use your bitcoin and understand the apps you are using. If it’s something that truly interest you in learning more of, we can get into the technicals with it.

First thing first, you need bitcoin. You can acquire bitcoin by working for it, mining it, or buying it. 99% of the world is buying it. You buy on an exchange. Coinbase, swan, strike, river, and hundreds of more are all examples of an exchange. You go to these websites to exchange money for bitcoin. I recommend using an exchange that sells bitcoin only. You link your bank account or debit card, you provide necessary ID, and now you can buy bitcoin. You can buy, sell, send, and receive bitcoin to the exchange. That’s all the exchange is, a place to buy and sell. 

I would recommend River, strike, or even cashapp. They are reliable and easy to make use. I use River and it’s very easy to use, you can setup auto buys like every payday, monthly, daily. Makes it easy to setup a $50 buy every Friday. This is called dollar cost averaging (DCA). You are essentially taking the risk out of guessing the price highs and lows, and just buying every week regardless of price. Bitcoin is a long game, accumulate as much as you can. Consistency is key to building a big stack of Bitcoin.

After you buy bitcoin, you now need to move that Bitcoin from the exchange to a wallet that you control. Keeping your bitcoin on the exchange after you buy it is risky. If that exchange goes bankrupt or something happens you will lose your bitcoin. Even though you bought some, it’s not technically yours until you send it off of the exchange. Even though we buy on the exchange we do not trust them. We saw that when FTX collapsed, and they stole customers funds who trusted them and never removed coins off of FTX into their wallets,

Instead of holding physical cash, like in the wallet in your back pocket, you are going to hold bitcoin on a “digital wallet” protected by private keys.

Just like your bank account, you will need a password to open the wallet. This password is considered your “private keys.” Consisting of 12-24 randomized words that acts as a “key” to your wallet. You lose the key, and you lose your bitcoin. You, and only you will know these words. These words should never touch any device that’s connected to the internet. No taking photos, no keeping them in a password storage app, not in the notes on your phone. Stamp these words on steel and hide it in a safe. Once again, you lose those words and no one in the entire world can help you. Don’t let that scare you though, take ownership and responsibility over your money. 

There’s 3 main types of wallets and hundred of “wallet providers” 

Theres cold wallets which is offline storage, there’s hot wallets which are apps on your phone or through a website, and desktop wallets like an app on your computer but the only thing it does is act as a wallet for storing bitcoin.

The purpose of these wallets are not only to store your bitcoin, but to sign transactions when sending bitcoin. This is where true control over your money happens. Every single wallet will generate addresses from within that wallet. These addresses are specific to your wallet, no one else’s. A wallet can generate millions of addresses. Addresses are what you copy/paste when sending or receiving bitcoin. Think of sending a letter. You need to send a b day invite for a wedding or b day. I give you my address, you put that on an envelope and it ends up at my house. Bitcoin works the same way. So after you buy bitcoin on the exchange you will then go to your wallet, generate a receive address because you are planning on receiving bitcoin to it, and you will copy that address. Then you will go to the exchange and hit “send” you paste that address and hit send. Usually within 10 minutes it will be in your wallet. At that point is when you officially take ownership over that bitcoin. No matter what happens to the exchange that bitcoin is in your custody and is yours. That bitcoin cannot be taken from you, confiscated, disappear on you, nothing. It’s 100% yours. 

This is also how we would send bitcoin to each other. I owe you $20? Send me a receive address and I copy and paste it into my wallets “send” and boom, I just paid you in bitcoin. Just like handing cash to each other. No Venmo, no failed transactions, no bank to block that transaction, no person or company in between me and you and that transaction. 

Cold storage is the most secure. I recommend a Coldcard made by Coinkite (the company) however there are many different providers, like ledger, trezor, seedsigner, etc.

Hot wallets generate a private key just like a cold storage wallet does, but it’s an app on your phone versus having a physical device (ledger/coldcard) the reason it’s less secure is because the private keys are generated on the app, which is on your phone (connected to the internet) to put it into perspective, to guess someone’s private key would be the equivalent of winning the lottery 9 times in a row, so very unlikely. 

You are going to download a hot wallet in the App Store such as Pheonix, Muun, aqua, etc. You will then write the private key (12-24 words) on paper, steel, or on something that you won’t lose it and it’s safe. You will be able to see how much bitcoin you have, the price, you will be able to send and receive from the wallet, generate addresses, essentially use bitcoin. So let’s say that bitcoin you have makes you a few bucks, you will have the power to send it to the exchange right away, sell on the exchange, and then send the cash to your bank. Or when you buy you’d be able to send to your wallet and have full ownership over that bitcoin. You cannot buy or sell bitcoin through your wallet, that’s done on the blockchain exchange.

A cool thing is that regardless of what happens to that wallet, or the app or your phone, as long as you have those private keys you can access your bitcoin. Let’s say you busted your phone, or your ledger broke. You would then just download a new wallet or buy a new wallet and import those private keys and everything will come right back, just like it was. Which means you can now go anywhere in the entire world with your private keys, and bring all that bitcoin with you. Can’t bring your bank account with you, can’t bring gold with you, can’t bring land with you. But you could bring your entire life savings with you anywhere in the world. 

There’s also the desktop wallet. So one could use Sparrow, on a laptop. It’s essentially like the hot wallet on your phone, but on the computer and it acts as a skeleton wallet for a hww. Biggest difference is that you use sparrow in conjunction with a hww to sign transaction. So the only thing I use a hww for is the generation of private keys, and to send bitcoin. I use sparrow to see how much bitcoin, coin control, generating addresses, consolidation etc. So the bitcoin lives in my wallet provided by my hww however I use sparrow to physically see that bitcoin, and generate addresses, send receive etc. 


This is a bare bones, not too technical write up if you don’t know what to do next. Good luck with your bitcoin journey, and take some sovereignty over your wealth. Your kids, and their kids will thank you for it.