The inevitable financial revolution

Henry

By Frank Karsten

“Come for the greed, stay for the revolution” is a winged saying of Bitcoin experts. You don’t have to have ideological reasons to buy this cryptocurrency – because besides, it helps to realize their financial revolution.

Bitcoin is “permissionless” because there is no central organization that determines whether someone is allowed to do something. Anyone can participate, and no one needs permission to make a transaction.

But if you want to buy Bitcoin, it’s unfortunately not as easy as exchanging dollars or rands at the bank. There is no store where you can buy it, and you cannot order it from online stores.

Fortunately, there are special exchange offices on the Internet where you can buy cryptocurrencies, the so-called exchanges, such as the American Coinbase and the Dutch Bitonic.

Because they are financial institutions, they must comply with the so-called KYC (Know Your Customer) legislation. As a result, the registration process for new customers is rather laborious, and they must identify themselves with a passport or driver’s license. Once this is done, you can buy a cryptocurrency and make transactions through their website. The exchange then manages your rands and cryptocurrencies, just like a regular bank.

In terms of safety and security, it is not optimal because the company could, for example, go bankrupt. When cryptocurrency exchange FTX went under in spectacular fashion last year, many customers lost their crypto coins. That is why the motto of bitcoiners is: “Not your keys, not your coins”, which means that you only really own your coins if you also manage them yourself.

This is possible with a free software wallet on your smartphone. You are then your own bank. I myself am enthusiastic about the Muun wallet because it is so simple and does not require personal registration. In addition, Muun supports the new Lightning Network, which enables cheap and fast transactions.

Unfortunately, you cannot buy Bitcoin with the Muun wallet, but you can transfer it from the wallet. With your software wallet, you can then do all kinds of transactions and, for example, pay for a coffee in a cafe. But most people will only keep it because they see it as an investment.

Those software wallets are quite secure, but not as secure as a hardware wallet. These are small USB devices on which the keys are stored. Since they are usually not connected to the Internet, they are considered more secure from hackers than software wallets. Well-known brands are Trezor (trezor.io) and Ledger (ledger.com). Because it is quite laborious to buy, set up and secure it, it is only recommended for people who have invested serious amounts in Bitcoin.

The best way to get introduced to Bitcoin, without KYC, is to know someone who already owns it. Then it also shows how “consentless” it is. You install the Muun application on your phone within minutes and give that person a certain amount of rands. You simply click “Receive” and the other person then scans your code to transfer the same amount of Bitcoin within seconds.

It shouldn’t take more than five minutes. You can then make transactions yourself and experience how simple it is.

You can then start to see the potential of Bitcoin and want to invest in it. In that case, you can make your purchases at a stock exchange. I wish you a good return, but of course I do not guarantee anything. The nice thing is that you can consider yourself a revolutionary because you are part of the financial revolution that Bitcoin is turning out to be.

  • Frank Karsten is the author of The Discrimination Myth (discriminationmyth.com) and co-author of The Democracy Beyond (beyonddemocracy.net).