Living on the Bitcoin Standard

Foreword

Living on the Bitcoin Standard means adopting Bitcoin as your primary form of money or store of value in daily life, similar to how individuals use fiat currencies like the US Dollar or Euro. It involves aligning your financial practices, lifestyle, and transactions to rely predominantly on Bitcoin instead of traditional banking systems or government-issued currencies. Living on the Bitcoin Standard represents a shift toward a decentralized, inflation-resistant financial system, but it requires careful planning, education, and adaptability due to the current limitations of Bitcoin in everyday use.

Core Principles of Living on the Bitcoin Standard

1 - Savings in Bitcoin:

Holding the majority of your wealth in Bitcoin rather than in fiat currencies.

Treating Bitcoin as a hedge against inflation and a long-term store of value.

2 - Earning Bitcoin:

Get paid for goods or services directly in Bitcoin. Work for employers who pay in Bitcoin or offer freelance services in exchange for BTC.

3 - Spending Bitcoin:

Use Bitcoin to pay for everyday expenses, including groceries, rent, utilities, and more. Transact with businesses or individuals that accept Bitcoin.

4 - Avoiding Fiat Dependence:

Minimize reliance on traditional banks, credit cards, or fiat currency systems.

Using Bitcoin-backed financial services, such as loans or payment systems.

Challenges of Living on the Bitcoin Standard

1 - Volatility:

Bitcoin's price can fluctuate significantly, affecting short-term purchasing power.

2 - Adoption Gaps:

Not all merchants or service providers accept Bitcoin, limiting where it can be spent.

Some jurisdictions impose regulatory or tax hurdles for Bitcoin usage.

3 - Transaction Costs:

Network fees for Bitcoin transactions can vary and may impact smaller purchases.

4 - Learning Curve:

Requires understanding Bitcoin wallets, private keys, and secure storage.

Why do People Choose the Bitcoin Standard?

1 - Store of Value:

Bitcoin is seen as "digital gold" due to its fixed supply (21 million coins) and resistance to inflationary pressures.

2 - Financial Sovereignty:

Bitcoin offers users control over their wealth without relying on banks or governments.

3 - Borderless Currency:

Bitcoin enables instant, global transactions without intermediaries.

4 - Ideological Reasons:

Many Bitcoin adopters believe in decentralization, transparency, and breaking free from fiat monetary policies.

How to Transition to the Bitcoin Standard?

1 - Start Saving in Bitcoin:

Gradually convert a portion of your savings into Bitcoin to build a BTC-based portfolio.

2 - Learn to use Bitcoin:

Set up a secure Bitcoin wallet for storing and transacting. Understand how to send, receive, and safeguard Bitcoin.

3 - Spend Bitcoin Where Possible:

Seek merchants and online services that accept Bitcoin.

Use Bitcoin debit cards thatconvert BTC to fiat for spending.

4 - Earn Bitcoin:

Accept Bitcoin for your services or find employers who pay in Bitcoin.

What is Bitcoin and How Does it Work?

1. Decentralized Digital Currency

Bitcoin is a digital currency that operates without a central authority, unlike traditional currencies controlled by governments or banks. No single entity, government, or organization controls it. This makes Bitcoin a "peer-to-peer" digital currency that people can use globally.

2. Blockchain Technology

Bitcoin transactions are recorded on a distributed public ledger called the blockchain. This blockchain is a chain of blocks, with each block containing a list of transactions. Each block is linked to the previous one, forming a secure, chronological record of all transactions. Each transaction is recorded on a "block." A block contains a set of verified transactions, along with a unique identifier called a hash. Blocks are added sequentially, linking each new block to the previous one, creating a chain—hence, blockchain. Since every participant (node) in the Bitcoin network has a copy of the blockchain, it’s nearly impossible to alter transaction records without altering the copies on thousands of computers, which would require massive computational power.

3. Peer-to-Peer Network

Bitcoin transactions occur directly between users on a peer-to-peer ( P2P ) network. This removes the need for an intermediary, like a bank. The P2P network allows users to send and receive Bitcoin globally without the delays and controlling from the government. Each transaction is broadcast to the entire network, where it awaits verification by miners.

4. Mining and Proof of Work

Bitcoin transactions are validated by miners, who solve complex cryptographic calculations to add new blocks to the blockchain. Miners are rewarded with new bitcoin for their work ( validating block of transactions) a process called Proof of Work. This is how new bitcoins are introduced into circulation.

5. Bitcoin Wallets and Keys

Bitcoin wallet is a digital tool that allows users to store, send, and receive bitcoins. Owners hold digital wallets, which store private and public keys used to send and receive Bitcoin. The private key is secret and is used to sign un transactions, proving ownership of the Bitcoin. The public key is shared to receive Bitcoin. A private key is a randomly generated string of characters unique to each user. It acts like a password, allowing users to access their Bitcoin and authorize transactions.

6. Limited supply

There is a fixed supply of 21 million bitcoins. This scarcity is coded into Bitcoins design to control inflation and maintain its value over time. New bitcoins are introduced through mining rewards, which are halved approximately every four years (in an event known as the halving). This ensures a predictable, decreasing supply over time. By around 2140, all 21 million bitcoins will have been mined, at which point miners will only earn transaction fees for validating transactions, rather than new bitcoins.

7. Transaction Verification and Security

Transactions are verified through consensus across the network. Once verified, transactions are nearly impossible to reverse, providing security against fraud. The decentralized nature and cryptographic security make it resistant to tampering and hacking. Once a Bitcoin transaction is initiated, it is broadcast to the network and added to a mempool (a waiting area for transactions) until it’s picked up by a miner. Miners then verify transactions by checking if the sender has enough Bitcoin and if they haven’t already spent it elsewhere. Once verified, the transaction is added to a block and recorded permanently in the blockchain. After several confirmations (other miners verifying the block), a transaction becomes almost impossible to reverse, adding to the network’s security.

8. Open-Source and Transparent

Bitcoin’s code is open-source, meaning anyone can view, verify, or propose changes to its code. This transparency ensures trust, as developers worldwide contribute to maintaining and improving the system. Community members, miners, and developers regularly review and contribute to the code, with major changes requiring widespread consensus among network participants.

9. Anonymity and Pseudonymity

Bitcoin transactions are pseudonymous, meaning users are identified by wallet addresses rather than personal information. This provides a degree of privacy, though not complete anonymity.

10. Volatility and Market-Driven Value

Bitcoin’s value is driven by supply and demand in the market, and it’s highly volatile due to its limited supply and fluctuating demand. External factors, such as news events, regulatory changes, and technological developments, often impact its price, leading to rapid increases or decreases. Bitcoin’s volatility, combined with it decentralized nature and fixed supply, makes it appealing for some as an investment or a store of value, similar to gold.

Frequently asked questions (FAQ)

1. Can Bitcoin be stopped?

To even have a chance to stop Bitcoin, every government in the world would have to successfully coordinate simultaneously to shut down the entire Internet everywhere and then keep it of forever. Even in that improbable scenario, the Bitcoin network can be communicated over radio signals.

2. Can Bitcoin be changed?

Yes, Bitcoin can be changed, but modifying it is a complex process that requires widespread consensus from the community. Here’s how changes to Bitcoin work and some of the main ways it can evolve:

A. Bitcoin Core (Main Implementation)

Bitcoin Core is the most widely used software implementation of Bitcoin. Although other implementations exist, Bitcoin Core plays the dominant role in the Bitcoin ecosystem.

B. Proposal Process (BIPs)

Bitcoin Improvement Proposals (BIPs) are the formal process by which changes or improvements are suggested. Anyone can submit a BIP. However, for it to be seriously considered, it must be well-written and solve an actual issue.

BIP types:

Standard BIPs: Propose changes to the Bitcoin protocol.

Informational BIPs: Provide guidelines or design issues but do not propose changes.

Consensus BIPs: Propose changes that require consensus from the network (e.g., changes to block size).

C. Peer Review and Consensus

Once a BIP is submitted, it goes through a peer review process by developers. It must undergo rigorous technical scrutiny. There is no formal governance process or voting structure; rather, Bitcoin uses a rough consensus approach, where the core developers and community must largely agree that the change is beneficial.

D. Adoption

Even if the Bitcoin Core developers merge a BIP into the codebase, miners and nodes must adopt and upgrade their software to implement the change. If a proposal does not gain broad support, it may lead to a contentious hard fork (e.g., Bitcoin vs. Bitcoin Cash).

Can Bitcoin be hacked or stolen from my wallet?

The Bitcoin network itself cannot be hacked because it is more secure than banks infrastructure, but your wallet could be at risk if you had a virus on your device ( notebook ) while you generated your private keys. If your device ( notebook ) is secure when generating the private keys, then it is more likely that you will win the lotto 7 times in a row than if someone guessed or hacked your private keys. Every transaction must be confirmed by the Ledger device. No hack or theft has ever happened directly over the Bitcoin network. Scammers are continually finding ways to use social engineering, phishing, and fraud tactics to trick crypto users to separate them from their hard-earned money. Be aware and never share your private keys and keep it offline forever.

How to store Bitcoin securely?

Cold storage, such as a Ledger hardware wallet, keeps your Bitcoin safe by storing your private keys offline, making it immune to online threats like hacking, phishing, and malware. By using a Ledger wallet, you protect your Bitcoin from online risks while maintaining full control of your assets. Not your keys, not your Bitcoin.

Can I access my BTC if Ledger goes bankrupt?

Yes, you can still access your crypto even if Ledger goes bankrupt. This is because your cryptocurrency is not stored on the Ledger device or held by the company itself. Instead, the Ledger hardware wallet stores your private keys, which are necessary to access and manage your crypto assets on the blockchain. Here’s why you can maintain access: Your private keys are generated and stored securely on the Ledger device, and you have a backup in the form of a recovery phrase (usually 24 words). As long as you have this recovery phrase, you can restore your wallet on any compatible wallet (software or hardware). Cryptocurrencies exist on the blockchain, not on the Ledger device. The device is just a tool to securely manage access to them. If Ledger goes bankrupt, you can import your recovery phrase into another wallet (such as Trezor, Trust Wallet, or MetaMask, depending on compatibility with the blockchain you use). Ledger uses open-source software, which means other wallets and tools can support the same cryptographic standards. You’re not locked into their ecosystem.

Conclusion:

My number one priority in life is my freedom and the ability to move and use my wealth as I see fit, whenever and wherever I feel like. The worst scenario in our lives is being dependent on banks and government. Private central banks not only control the cost of capital in the form of monopolized interest rate adjustments, but also hold the keys to a money printer that they use to enrich themselves and their friends at your expense. At no cost to them, they debase our currency with the click of a button, eroding the purchasing power of everyone in society. With access to an infinite money printer and the ability to track even the smallest details of our lives, governments have been able to increasingly encroach upon our freedoms. Fortunately, financial, technical, and geographical arbitrage options exist and are readily accessible. With the right tools and the right knowledge, you can find ways to protect yourself from the chaos created by politicians, central bankers, and Fortune 100 conglomerates. You can reclaim your freedoms. Self-sovereignty, it turns out, is half mindset, half knowledge. Once you've successfully become your own bank and secured your Bitcoin properly. Your wealth is just in your hands, and you are no longer a slave controlled by this system. Take control now.

Dominik Urbanics