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This article hopes to complement the article by Lyn Alden on YouTube: https://www.youtube.com/watch?v=jk_HWmmwiAs ## The reason why we have broken money Before the invention of key technologies such as the printing press and electronic communications, even such as those as early as morse code transmitters, gold had won the competition for best medium of money around the world. In fact, it was not just gold by itself that became money, rulers and world leaders developed coins in order to help the economy grow. Gold nuggets were not as easy to transact with as coins with specific imprints and denominated sizes. However, these modern technologies created massive efficiencies that allowed us to communicate and perform services more efficiently and much faster, yet the medium of money could not benefit from these advancements. Gold was heavy, slow and expensive to move globally, even though requesting and performing services globally did not have this limitation anymore. Banks took initiative and created derivatives of gold: paper and electronic money; these new currencies allowed the economy to continue to grow and evolve, but it was not without its dark side. Today, no currency is denominated in gold at all, money is backed by nothing and its inherent value, the paper it is printed on, is worthless too. Banks and governments eventually transitioned from a money derivative to a system of debt that could be co-opted and controlled for political and personal reasons. Our money today is broken and is the cause of more expensive, poorer quality goods in the economy, a larger and ever growing wealth gap, and many of the follow-on problems that have come with it. ## Bitcoin overcomes the "transfer of hard money" problem Just like gold coins were created by man, Bitcoin too is a technology created by man. Bitcoin, however is a much more profound invention, possibly more of a discovery than an invention in fact. Bitcoin has proven to be unbreakable, incorruptible and has upheld its ability to keep its units scarce, inalienable and counterfeit proof through the nature of its own design. Since Bitcoin is a digital technology, it can be transferred across international borders almost as quickly as information itself. It therefore severely reduces the need for a derivative to be used to represent money to facilitate digital trade. This means that as the currency we use today continues to fare poorly for many people, bitcoin will continue to stand out as hard money, that just so happens to work as well, functionally, along side it. Bitcoin will also always be available to anyone who wishes to earn it directly; even China is unable to restrict its citizens from accessing it. The dollar has traditionally become the currency for people who discover that their local currency is unsustainable. Even when the dollar has become illegal to use, it is simply used privately and unofficially. However, because bitcoin does not require you to trade it at a bank in order to use it across borders and across the web, Bitcoin will continue to be a viable escape hatch until we one day hit some critical mass where the world has simply adopted Bitcoin globally and everyone else must adopt it to survive. Bitcoin has not yet proven that it can support the world at scale. However it can only be tested through real adoption, and just as gold coins were developed to help gold scale, tools will be developed to help overcome problems as they arise; ideally without the need for another derivative, but if necessary, hopefully with one that is more neutral and less corruptible than the derivatives used to represent gold. ## Bitcoin blurs the line between commodity and technology Bitcoin is a technology, it is a tool that requires human involvement to function, however it surprisingly does not allow for any concentration of power. Anyone can help to facilitate Bitcoin's operations, but no one can take control of its behaviour, its reach, or its prioritisation, as it operates autonomously based on a pre-determined, neutral set of rules. At the same time, its built-in incentive mechanism ensures that people do not have to operate bitcoin out of the good of their heart. Even though the system cannot be co-opted holistically, It will not stop operating while there are people motivated to trade their time and resources to keep it running and earn from others' transaction fees. Although it requires humans to operate it, it remains both neutral and sustainable. Never before have we developed or discovered a technology that could not be co-opted and used by one person or faction against another. Due to this nature, Bitcoin's units are often described as a commodity; they cannot be usurped or virtually cloned, and they cannot be affected by political biases. ## The dangers of derivatives A derivative is something created, designed or developed to represent another thing in order to solve a particular complication or problem. For example, paper and electronic money was once a derivative of gold. In the case of Bitcoin, if you cannot link your units of bitcoin to an "address" that you personally hold a cryptographically secure key to, then you very likely have a derivative of bitcoin, not bitcoin itself. If you buy bitcoin on an online exchange and do not withdraw the bitcoin to a wallet that you control, then you legally own an electronic derivative of bitcoin. Bitcoin is a new technology. It will have a learning curve and it will take time for humanity to learn how to comprehend, authenticate and take control of bitcoin collectively. Having said that, many people all over the world are already using and relying on Bitcoin natively. For many, it will require for people to find the need or a desire for a neutral money like bitcoin, and to have been burned by derivatives of it, before they start to understand the difference between the two. Eventually, it will become an essential part of what we regard as common sense. ## Learn for yourself If you wish to learn more about how to handle bitcoin and avoid derivatives, you can start by searching online for tutorials about "Bitcoin self custody". There are many options available, some more practical for you, and some more practical for others. Don't spend too much time trying to find the perfect solution; practice and learn. You may make mistakes along the way, so be careful not to experiment with large amounts of your bitcoin as you explore new ideas and technologies along the way. This is similar to learning anything, like riding a bicycle; you are sure to fall a few times, scuff the frame, so don't buy a high performance racing bike while you're still learning to balance.