- Please stop illustrating Bitcoin as a physical golden coin
Just now·5 min read
Bitcoin is still an often misunderstood technology. In this article, I will bring up my opinion on one particular aspect that leads to a crucial misunderstanding of its technology. As a result, it prevents people from being interested from the very first second they are getting in touch with this wonderful digital store of value.
Photo by Mitya Ivanov on Unsplash
Some years ago, when I studied at university, I had my first touchpoint experience with Bitcoin. Back then, I commuted to the university by train, and eventually, I recognized a news screen at the train station, which was showing up a headline for news about Bitcoin. I cannot remember the full title, yet it told me something like the following:
Bitcoin dropping below a price of $1,000. The bubble of internet money is about to pop.
Then there was a picture shown below the news headline, which looked quite similar to the following:
Photo by Dmitry Demidko on Unsplash
At that time, I enjoyed role-playing games and hack-n-slay games e.g., the famous Diablo III, and was familiar with various forms of digital gold or internet money, which could be used to pay for capes or swords and other digital materials within those games. However, it was a bit confusing to see physical or non-digital coins in the picture about internet money and I wondered: How in the world can this be internet money? Or is there chocolate behind the aluminum foil? Why should anyone pay a thousand dollars for something that can be produced in a souvenir minting machine set up in theme parks (Never seen such a thing)?
Accordingly, this picture led me to some misinterpretations, while I was just scratching on the surface of the cryptocurrency space. Thus, I was only semi-interested, when I looked up additional facts about Bitcoin on the internet and did not understand them at the first go.
There were some articles about this mythic internet money, yet I could not imagine how such a collector’s piece (still believing it was tangible) is considered internet money. “These are physical coins!”, I thought and discarded any further research for years.
In hindsight, being semi-interested in Bitcoin cost me thousands of dollars. I will never be semi-interested in a new technology again.
The problem with representing Bitcoin in a meaningful manner
Still, writing the year 2021, whenever I open my web browser to search for Bitcoin news, everything that I get is articles with the same cover pictures showing a physical Bitcoin. I am sure that you, who is reading this article, experienced that issue as well. Maybe it also bothers you.
Bitcoin is not a tangible asset and it is the first type of money without any non-digital appearance. That is the point. There has always been money, which is represented in two forms. The most common form is the physical one i.e., coins and banknotes. Meanwhile, we accept that money can be displayed digitally as well. Unfortunately, some people still believe that, somewhere in the world, there is non-digital storage of their bank account money.
Maybe, this is one of the reasons for people looking out for a physical or even the often quoted intrinsic value of Bitcoin. CZ of Binance is joking about this, using the Internet as a comparison:
It is funny to see that even E-mails are still illustrated with letter envelopes. Mankind is sticking to its habits. This is okay for E-mails, but, in my opinion, it is not for Bitcoin.
This time it’s different! ;-)
Apart from printed private keys or handwritten seed phrases, there is no way to represent Bitcoin physically. Living in a world, where data is a key factor in the success of large companies, we have to get used to the value of things that were never meant to be physical.
Bitcoin is not golden and particularly not a coin
Personally, I like to call Bitcoin digital gold because it has a lot of characteristics in common with the original gold. Bitcoin even enhances most of these joint attributes. While true gold is a scarce asset until proven wrong, Bitcoin is mathematically scarce by design. The stock-to-flow rate is similar to gold and additionally, constantly increases over time.
One key aspect, which severely differentiates Bitcoin from gold is its divisibility. When I regard those famous, shiny Maple Leaf or Krügerrand ounces of gold, I do not see a chance to exchange only a half of it without enormous efforts. On the other hand, one Bitcoin is consisting of a hundred million satoshis. I just have to type e.g., 0.5 BTC into my wallet to send a fraction of my Bitcoin. On top of that, Bitcoin itself is nowhere represented in its own source code, there are only satoshis functioning as the unit of account. Ask Gigi on Twitter about this fun fact.
What I want to say is that basically, it is possible and it is common to compare Bitcoin to gold. Although, the crucial issue is that we compare them based on properties in which Bitcoin and gold fundamentally differ, such as being golden or even being a coin.
Does Bitcoin fix this?
Bitcoin itself fixes so many things, now it is our turn to fix its image. My personal preference for illustrating Bitcoin is a simple QR code. Each transaction on the Bitcoin network can be executed by exchanging a QR code.
Alternatively, I like displaying the payments of cryptocurrencies in the same way as online banking systems. Today, most people are already familiar with digital banking, so it would be a smaller step to take for them to switch from fiat money into cryptocurrencies.
What about this picture, where we maybe should replace the label of Alibaba with the Bitcoin logo?
Photo by Markus Winkler on Unsplash
Let me know your opinion!
- Date of publication:
- Tue, 05/04/2021 - 13:34
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