The Basics of Bitcoin with John Bush of Live Free Academy

Bitcoin was invented in 2008 by a pseudonymous programmer (or group of programmers) called Satoshi Nakamoto. It is a currency issued in a decentralized fashion using a complex mathematical equation on a block chain. Bitcoin then launched in 2009 and was adopted by very few people but it held out a promise to usher in a new way we can look at money and preserving value of our time and labor without a central bank debasing it. Bitcoin has since gone from a value of well under one penny to about $40,000 per coin in 12 years.

What's a Cryptocurrency?

My guest today is John Bush, a cryptocurrency advocate and owner of the consulting/teaching institute Live Free Academy. He has been an advocate of bitcoin since 2013 where he gained some prominence attempting to travel around the country with his family using only bitcoins to buy what they needed. Since, he has been a podcaster and teacher for those who want to use bitcoin and other cryptocurrencies to improve their lives.

He says all cryptocurrencies, like bitcoin, are basically computer programs that either require computers to solve complicated mathematical equations to verify all the transactions of the block. For their reward, these computers (or miners) are rewarded with newly minted coins. Likewise, with millions of computers attempting to solve this equation, there are a lot of computers that are verifying that all the transactions on the chain were legitimate and the integrity of the chain is preserved.

What's a block Chain?

The block chain is maybe best thought of as a sheet of paper that has every transaction of every coin on it. And with each new creation of a block, the transactions are updated, new coins are added as rewards, and all the decentralized nodes work to verify and agree with the transactions that are on the block. Then a new block is added to the previous as the process is continued forever.

One can see the utility of this technology not only in verifying that the funds used to buy something were real and in someone's possession but also in other contracts or information. I spoke to Dr. Huston way back in episode 018 where she described her plan on using block chains to protect the integrity of physicians' credentials. This means they would control the information and not some health system and would keep it far more secure. You could also use the block chains for other personal information like your health which is what my guest, Brendan Hodge, in episode 014 proposed with Citizen Health.

How Do You Get Started iN Cryptocurrency?

As with everything, getting started is the hardest part of process. Buying, trading, and investing take a little experimentation. But if you have any technological saavy, it isn't too hard to figure out. You merely have to decide what cryptocurrency to buy (there are 8 thousand choices and counting) and then whether or not you want to be in charge of the coin itself or have someone else hold it for you. The exchanges will hold the key to the coins you purchase and allow you to take possession, hold them in their vault, or trade them with other currencies.

Most of the exchanges like Coinbase, Binance, Kraken, or others allow you to convert your fiat (US Dollars) and purchase the new currencies for a fee using either your bank account or credit card. Trading and exchanging always cost some fee which varies depending on the types of coins being purchased and exchanged anywhere from a few dollars to fractions of a penny.

Why Should You Purchase Cryptocurrency?

The big question, is why buy this currency which seems to have so much volatility? John Bush thinks it is wise to be invested in crypto for a couple of reasons:

1. Our fiat dollars/euros/yuan are being continually inflated away to lose their value. Many cryptocurrencies, like bitcoin, are very limited in their creation and can hold their value over time much better.
2. The world is moving more and more to online and digital currencies will be more commonplace.
3. There are a lot of other uses like decentralized finance (which we will discuss in episode 141) which are available if you have cryptocurrency to use as collateral.
4. It is a way for the unbanked to have access to capital in many parts of the world opening paths to financial freedom.