Bitcoin is in the news daily. In New York City, incoming Mayor Eric Adams wants to be paid with Bitcoin. Some companies actually do pay employees with Bitcoin. For all the attention Bitcoin gets, most people really don’t know what it is or how it works. Yet Bitcoin is seen by many as a smart investment and a hedge against inflation So what is Bitcoin? How does it work? Why is it a smart investment? How can it be explained easily?
I had a chance to interview New York Times bestselling author, Chris Brady, author of The Bitcoin Bride. Like many people, Brady was familiar with the term Bitcoin but not what it actually was. He found most reports too technical to follow. ow in the Bitcoin Bride, he explains what Bitcoin is, in an easy to read and concise way. Brady also says he has found that Bitcoin is the best defense against inflation.
Tell us about The Bitcoin Bride:
The Bitcoin Bride is a fictional romance novel designed to teach readers about Bitcoin while they enjoy a good story. As such, it is unique in the Bitcoin space. While there are many great books about Bitcoin, they are all written in an expository style and aren’t the type of book to be read by the vast majority of readers. The intent of The Bitcoin Bride is the story will be so compelling it will keep the reader interested in learning a topic they otherwise might not explore.
What made you write the book?
I once heard the rock-and-roll group KISS interviewed and they said, “they simply became the band they could never seem to find to watch in concert.” That is precisely why I wrote The Bitcoin Bride. In conversations with people from all walks of life, I could never seem to find the right book to hand them as a follow-up to our conversation. What I discovered was that most people simply will not read a serious business-style book on the topic. So I wrote a story that would carry along through the teaching of Bitcoin so people would actually read (and enjoy) it.
What was challenging when writing the book?
The biggest challenge was distilling a massively complex subject down into simple instruction. As a business owner and entrepreneur, I have learned the hard way that “simple” is not easy. In fact, producing something simple and easy for the user is an excruciatingly difficult task for the producer. This is particularly true for a teacher tackling a subject such as Bitcoin, which involves not only economics, but computer science, monetary policy, history, cryptography, and some geopolitics. As part of this, it was imperative that I spend a lot of time talking to people who knew nothing about Bitcoin so I could stay in touch with their questions and how they processed the information. Taking careful note of this again and again enabled me to craft the story and its instruction in a way authentic to the learning process, matching and anticipating questions readers would naturally ask as they read through the story.
Bitcoin has been around for a little bit but still feels new. In simple terms, what is Bitcoin and how does it work?
Bitcoin has been around for almost 13 years but is still misunderstood by the vast majority of people, yet it is perhaps the greatest new technology since the Internet. Essentially, Bitcoin is the invention of non-government money. What the Internet was to information, Bitcoin is to value. Some have said it is the separation of “money and state.” It is a money system that was invented by anonymous people and runs on its own without any centralized control or government involvement. We have become so accustomed to governments issuing and controlling all the money we use, that it takes a moment to wrap our heads around money that has nothing to do with any nation’s government.
At its most basic level, Bitcoin is just a computer program that runs on tens of thousands of computers around the world. This network verifies and records transactions, and controls the amount of Bitcoins issued. Unlike government monies of the world, which are issued at will to help governments finance their over-spending habits, the total amount of Bitcoins will only ever be 21 million. This little fact is so staggeringly different from the fiat currencies of the world, that it is one of the main features of what makes Bitcoin so special. There is a set, known, fixed supply that will never be changed. This means that Bitcoin is not only scarce, but finite. If you think back to your Economics classes in school, you’ll remember that supply usually expands to meet demand. But this is not the case with your human time, for instance; no matter how much you would like to live longer, your supply of time is limited (and even mysteriously unknown)! Until Bitcoin, human time was the only truly finite resource in our world. This finite supply of Bitcoin means it is an excellent store of value, as no one can ever make more of it and no government can tamper with its supply. Bitcoin therefore becomes a safe place to store some of the fruits of your labor. While US dollars, for instance, are being debased and losing their value significantly over time, Bitcoin’s supply will never respond to demand and so it’s value should only go up, long term, over time. Ultimately, Bitcion is a new savings technology, what some people are referring to as “Gold 2.0.”
Why might Bitcoin be a good investment for people, especially single moms or young families?
Bitcoin as a store of value becomes an attractive investment for everyone who is trying to get ahead financially. Because of constant inflation, people can’t really just work hard and save their money any more. They must instead work hard and then also learn how to invest their money if they intend for it to last over time. This means that people essentially have two jobs; earning and investing. But investing is difficult, complicated, and risky. What if people could just simply save the hard-earned fruit of their labor in a way that wouldn’t decay over time? That’s exactly what Bitcoin offers. For single moms or young families trying to make the most of what they have, Bitcoin is an excellent way to preserve what they save.
But that is not all. Because of Bitcoin’s finite supply, as it becomes more widely adopted as a growing number of people wake up to its advantages, the price of it must necessarily go up. Like scarce ocean-front property that nobody can ever make more of, whose price only rises as time goes by, so too must Bitcoin respond to free market forces as adoption grows. This means that beyond just the savings component discussed above, there is also a possible wealth-building aspect. Buying Bitcoin and holding it for the long term has the potential to grow one’s wealth significantly. While past performance can never guarantee future actions, it is still exciting to look back and see that Bitcoin has appreciated over 800% in the past 5 years and 2,000,000% in the last 10!
What are some cautions about investing in cryptocurrency?
All assets carry an aspect of risk. There are no guarantees in life, especially when it comes to money. With Bitcoin, because it is a relatively new asset class with a market capitalization (the total number of Bitcoins times the price of one Bitcoin) of about $1 Trillion so far (compared to over $10 Trillion for gold), it’s price is subject to a lot of volatility. This means that the holder of some Bitcoin should expect to see it’s price move around quite a bit in the short-term. However, the reader should not confuse volatility with risk. Just because the short-term price fluctuates significantly doesn’t mean Bitcoin won’t appreciate over time. In fact, many experts say it is this very volatility that produces the large returns Bitcoin has demonstrated over the years. Also, as Bitcoin’s market cap grows this volatility should flatten out.
As regards all the other “cryptocurrencies” in existence (and there are thousands of them), most do not have Bitcoin’s unique properties. Only a few of these “alternative coins” have the long-term promise of Bitcoin. However, they should all be viewed as distinctly different from Bitcoin. While Bitcoin is money, and could be seen as analogous to the Internet, all of the “alt coins” are more like companies. Think of the many companies that sprung up around the invention of the Internet and resulted in the “dot com bust.” Some companies survived, but most went up in smoke. Further, and another reason the alt coins should be looked as as companies, is much regulation is headed their way as their properties are not those of a commodity, as the US Government long ago determined Bitcoin to be, but rather those of a security. Because of this, much heavy regulation is headed their way, and when that hits, it is predicted that many of them will collapse in price.
As with anything, always do your own research, and don’t make any moves without carefully considering the specifics of your particular financial situation. I often recommend to people to just buy a tiny little bit and begin learning that way. You don’t have to buy a whole Bitcoin, but can buy a tiny slice of one. That is a great way to begin.
Do you plan to write a sequel to The Bitcoin Bride?
When I set out to write The Bitcoin Bride I did not do so with a sequel in mind. But the characters took on a life of their own and soon began behaving in ways I couldn’t control! By the end of the book they left open a few questions that readers have been clamoring for me to answer. (If you haven’t read the book yet, I won’t spoil anything here). So yes, if enough reader interest persists, there is more to tell about Marcus and Cassandra, Giulio and Stefania, Nonna, and even little Crescendo. Stay tuned!
(Nothing in this article should be construed as investment advice. Any opinions expressed are not, and should not be read as, a recommendation to make any investment.)
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