Bitcoin Crash Course For Beginners | Timothy Cunningham | Skillshare

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Bitcoin Crash Course For Beginners

teacher avatar Timothy Cunningham, Online Instructor

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

12 Lessons (47m)
    • 1. The Bullish Case For Bitcoin

    • 2. The History Of Money

    • 3. Currencies aren't Volatile?

    • 4. Risks Of Bitcoin

    • 5. Is Bitcoin For Criminals?

    • 6. How Bitcoins Are Created

    • 7. Inflation And Deflation

    • 8. Is Bitcoin a bubble?

    • 9. Quantum computing Threat

    • 10. Can Users Collude Against Bitcoin

    • 11. What I Think Bitcoin Is Worth

    • 12. Final thoughts

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About This Class

In today's class, I will teach you about the groundbreaking technology that is Bitcoin.
To first understand Bitcoin, you must first understand a little bit about the history of money and things we have used in the past as a form of barter.

We will go over the volatility of Bitcoin and how this creates a lot of confusion as to whether it can act as a currency. I clear all of this up for you in the class.

We will also go over the risks of investing in Bitcoin if you choose to do so as far as I can see them.

Whether Bitcoin is used by criminals and what this means for Bitcoins future.

How bitcoins are created, as well as how the network is secured.

The benefits of Bitcoin compared to government-backed inflationary money such as the dollar.

We will also talk about if Bitcoin is a bubble or not and clear all of this up as well as the scary word used by mainstream media. The threat of supercomputers to bitcoins security as well as potential collusion by participants in the Bitcoin ecosystem.

I will go over my thesis as to what I think bitcoin will be worth in the future and why.
If you want to learn more about this groundbreaking technology, I look forward to seeing you in the class!

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Timothy Cunningham

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2. The History Of Money: Welcome everyone. Welcome to the claws are we're just gonna guard with first the history of money. So you can understand money at its base level because what is money? A lot of people in society can't really answer this question. It's something that's become a completely oblivious to losses. It's sewing granddad daily lives. We don't even question what makes a good money and why Bitcoin is the best money that's ever been invented relative to other currencies and forms of money that have existed in the past. So are things that we've used in the past such as money is gold, which is a hot and money. Okay? We will see US now government-backed paper currency, things that we've also used in the past. So things such as salts palms and chase Cargo Baines, you name it. Okay. So what makes a good money? There's some k traits he, that man, clock Ahad of money are good money. Okay, sorry, it needs to be fungible interchangeable neurons. So something you can transfer quite easily. Non-consumable, sorry, good money is something that you can't consume because if you want to stall value and it's something that's consumable and something that doesn't, doesn't hold its value. It's not gonna make good form of money. And that's things, what things such as salt and cargo Baines and Locke's didn't lost as Ahad form of money to sign his life that he's been non as at 1 as well. The reason why is because if you want to store that money to purchase goods into the future, things such as that aren't going to hold their value because it's going to degrade because it's consumable, okay, so something that's non-consumable is needed for good money. Something that's portable, okay, So something with you that you can take with you everywhere, okay? Now, gold, fiat currencies quite good in this respect because it's easy to carry large amounts of cash with you wherever you go, okay? The portability of gold isn't so good, okay? So even though it is a hot, a form of money, okay? It actually has value in the gold itself. It's not very easy to carry around a fair amount of gold with you, okay? It also needs to be durable, okay, so our gold has this characteristic working for it. The durability of God. He's fantastic. Very hard to destroy gold day. It's actually damn near impossible to destroy God. Government backed currency files in this respect to k, because you can burn the pipa. It's not a very durable store of value, okay? Now, bitcoin is a very durable store of value, okay? You can't, you can't really steal someone's Bitcoin as long as you take the proper precautions to store your funds. Okay? The odd day behind Bitcoin is to become a sovereign individual, okay, completely independent of any a third party or authoritarian government, alright? Fungible crypt or such as Bitcoin. He's very fungible. It's easy to transfer, okay, as long as you have an Internet connection, you can transfer one billion dollars, one DLA P2P with another person and it's really not going to matter. So the amount of money that you want to transfer it with Bitcoin is completely irrelevant to the 0s of the transfer taking place, and it's also a non-consumable. It's very hard to destroy Bitcoin because it's an Internet Protocol. And it's shown great resilience over the years. So you can't really destroy the particle many people have tried. But due to this day centralized and IHL. At no one's been successful so far. Sorry. Another form of VOC tried of good form of money is hard to visibility. Okay? So if you want to, if you have a piece of gold rot and it's with, let's just say $500, okay? But you want to buy a coffee, it's going to be very hard for you to walk, divide that gold up into what's with flawed doulas a K. So although gold is a hotter form of money, it's not Khalid divisible on government-backed currencies is a little bit better in this respect because they handout to the citizens here at pace of pipa or coins respective too, you know, whatever you posting so that you don't have to go to such great lengths to divide up the value of what it is that you want to purchase. Bitcoin is infinitely divisible, okay, So it's far better than other currencies and forms of money that have existed in the past. And even today's currency. And you want something that's secure. This is another good trait of money that cannot be counterfeited. Gold a 100 percent can be counterfeited. And it does that make the outside of the gold really tough and to make it look like it's actually gold. But if you get a hammer into a fight pace of gold, you'll notice it'll open up and they'll be nothing inside. Okay, So it can be counterfeited, um, which is not ideal, the same as government-backed currencies. It can easily be counterfeited as well if you want to guard to great lengths. Bitcoin is the best in this aspect as well because it's secure and it cannot be counterfeited, okay? You can copy the Bitcoin protocol. But a lot of people have tried. And the reason why that doesn't particularly work. These because you've got all these nerves around the world and paces of software that are designed to work with Bitcoins specific protocol. Now, even if you were to copy the Bitcoin protocol with which many people have DOM by creating Bitcoin Cash Bitcoin gold, it doesn't work because the Bitcoin network has already been well-established and it's more decentralized and these other networks and it's more secure. Okay, so even if you were to copy Bitcoins card, it's much more easy for a bunch of MON as to get the hashpower to create a 51 percent attack on the network, which means that they control the network. Whereas bitcoin now it's well established, it's decentralized. No one is going to move to a different particle if payable, just copy Bitcoin souls card because that isn't urban soils card, just because you to that decentralized nature and security of the network that already exists today, okay? Sovereign government issued currency. So a good form of money is something that's not government issued because you don't want people in Palo to have the ability to create money out of nothing. And you'll notice in society say this is a lot of social unrest and claws separations from the wealthy in the poll. A big pot of this is that the governments continue to print supply of money. So they want, say, he's a $1000 which they did for COVID, they gave a lot of this citizen's money to survive. So to say he's a $1000 will help you survive. Now, if you don't know much about money, you might think this is a good idea. But when they giving you that money, that actively devaluing the currency, everything is denominated. The answer. Sir, and when I say that the their ability to do that is infinity, you don't need to be that smart to realize that what you're holding is worthless. If you have an infinite supply of something that's just going to be able to make, you know, purchases a much goods, okay? And also what it does is if I give you $1000, but asset processing craze bought 10000 doll was who does that really helped, but it doesn't help the little gauze luck you. That helps the paper with assets increase the asset value and get rich while you can't even get on the school board and bought those assets. Okay. So you can see why government-backed form of money, all right, isn't ideal. Gold was sort of not too bad in this respect, okay, but because it wasn't easy to transfer around, what they did was, is they made sure that gold itself, they made the government backed currency. Okay? And they said, Okay, for every piece of paper I'll give you, I'm going to make sure, and I promise you that it can be backed by this amount of gold, okay? But they started handing out a lot more paper money that wasn't backed by gold. And this created the spiraling out of control than just making money out of thin air and creating that clause separation amongst the Saudi, okay. Whereas bitcoin isn't government issued in any way, shape, or form. Okay? So it's, uses a system called proof of work, okay? It's the first money in history to have a 0% terminal inflation rate or is no inflation, so there's no fat integrating the Bitcoin block the rays with your doulas, okay? Because they degrade it when I make the supply infinite. Okay? So I think that's pretty simple for many of you don't understand if you have any questions, put it in the discussion area. Okay. Whereas became points supplies capped at 20 million coins. They're on the way to get it is to sacrifice resources to obtain it will work for it. Okay? So you can mon Bitcoin by solving complex computer problems, okay? It's like puzzles, if you will. So if you solve the hours, you'll get rewarded with some big coin and you get rewarded for all so making transactions be processed on the network, okay? So I'm not government currency with I don't have to walk forward. They can just make it out of thin air. Just lock that. We're printing a trillion dollars, which I did with carve it. And I'm sure many of you utilize and artists as well. That can't happen with Bitcoin. No one's just going to cram will be calling like that. You'd have to work to obtain it. Okay? And that's no government issued which allow, which makes that more attractive. Okay, So this is one of the reasons why bitcoins sitting at a trillion dollars right now, because it's basically the separation of money in state. And you'll notice a lot of the reasons why the media and especially government and central banks that didn't speak to Hollywood Bitcoin and that's because they know it's a threat. Okay. That's a threat to the money printing. Money, prints are, and they've got that monopoly on money right now. They benefit from a quite a bit. You don't, and I don't want to give that up so easily. And because Bitcoin is that threat, that's why you notice that they don't speak to Hollywood Bitcoin, okay? They say it is a speculative asset, whereas the inner cache is a speculative bet. So the cash that you have is a speculative bet that these papal that control the money prints on know exactly what they're doing. But can you imagine that when it comes down to is who do you trust you trust card or do you trust humans? Remain Bitcoin. He's fully verifiable monetary policy, whereas the Fed Federal Reserve has stated many times at that I don't want to be audited. So you can verify what they doing, okay. At any point in time you can go and Bitcoin's blockchain and check every transactions. You can verify the monetary policy of the network when it wants her. It's a more honest and publicly equitable system. Another thing as well that makes a good form of money is something that is decentralized. Meaning obviously, there's no control. There's lacA over 10 thousand yards around the world that make the Bitcoin network work. Okay, so it's completely de-centralized. Much unlock the government currency which is controlled by a few. And now the good Try to money is smart and programmable. Smart and programmable. So Goldie, some program will, because a smarter technology either as the government backed currency that is issued through central banks. Now, Bitcoin, it isn't so easy to program it on the Bitcoin protocol, but there's another lack second, via solutions own baseline is you can program on the Bitcoin network because one of the troubles that Bitcoin had was it was very slurred to transact on the network. Okay, so it was very slow. So this second line of solutions that are being built on top of it, like things such as the Lightning Network that happened off chain. Okay. The microtransactions much more fossa, not so those are the traits of money in the history of money, the things that we're sort of used in the PaaS so hard that helped. Hope you learned something and we'll just move on to the next lesson. 3. Currencies aren't Volatile?: So I'm just going to touch on now the volatility of Bitcoin and the speculation of it as a global reserve asset or currency, if you will. Okay, so what do people say? How can it be a currency if it's sort of all tall? This is a chicken and egg scenario. If there's no liquidity in the market, all right, it can't be used as a currency because there's no one to transition from a medieval strange if you have Bitcoin and there's no other participants in the market, you won't be able to use it to purchase goods and services. And the volatility comes from how small the market is relative to other currencies. K, sorry, for Bitcoins process to stabilize a large scale sort of economy needs to develop within that ecosystem for people to use it. So notice over the years that it has gone from a relatively very small currency, from just a couple of $100 million market cap to something that's now one true and 0 asset, okay? So I see fussy when it gets up to Bitcoin's, gets up to golds market cap, which if it gets up to go its market cap, it'll be a lot more stable the more of these today I'm any fuel. Look at the stability of gold, which used to be the currency of tried. And he's much more stable and more Bitcoin is okay. So fortunately for people that do use Bitcoin, gold volatility doesn't necessarily affect the main benefits of Bitcoin as a payment system to transmit money. So R from point a to point B. So it is possible for businesses to convert Bitcoin payments to their local currencies instantly if they choose to do that right now, okay, so, yeah, the volatility is just a product of framework and adoption. Okay. So when you have the currencies that we're using today that is like forced upon everyone. So it instantly has liquidity. If everyone in your country is using your inner fatal government-backed currencies, there's instant liquidity there if you're forced to use it, the volatility comes from a new form of money being adopted by the market. So the liquidity isn't there because it's being freely adopted. Okay? It's more a libertarian stall, currency more than, it's not sort of capitalist vehicle, socialistic. It's more of a libertarian install form of money. So a lot of libertarians sort of Fonda attractive as well. So that's where the volatility comes from. Obviously as adoption increases, you will say that volatility decrease. And this is something that we've already seen. Many. If you look at bitcoins volatility from alias in 2012, 2013, it was true to three tons, even more vowels, all the more of these now try to block a penny stock. And even there today in 2021, it's still is quite volatile. That volatility has decreased as more market participants have come in and there's more liquidity and more money within the ecosystem. This is obviously not going to be a problem if Bitcoin continues to increase in saw as the volatility is going to be not as volatiles. What are these now? Okay, so what he's going to move, but over time, maybe another 10 years, 15 years, that volatility will decrease and that is also an opportunity. So the volatility itself, although it's not good for beacons views, currency today, early adopters of this new technology will be rewarded if it goes on to be successful. So I hope that helps you understand. 4. Risks Of Bitcoin: So we're just going to run our Vault. All of the risks of investing in bitcoin. And why is it which the Bitcoin protocol can file as a decentralized currency. So this is something that I've really thought about a lot over the last couple of views of how it can file, because there isn't our single-point of failure in Bitcoin itself, but there's always risks in every investment. And so we want to go over that to you now and just explain to the risks that all thought about towards investing in Bitcoin over the years so that you can get a good understanding and decide if it's something that you might want to look into a little bit further. Oh, invest in yourself, but this is just for educational purposes. This is not financial advice. All right. Sir, one of the risks of families bitcoin is that all of the mining equipment is made by only a couple of supplies. Sir. If that wanting equipment was corrupted somehow, then they could potentially control the net Bitcoin network or out by corrupting the software of Bitcoin itself. Over time, more paypal and companies are developing the appropriate morning oh, quit when full Bitcoin. So that is one of the more centralized aspects of Bitcoin, which is a risk to his protocol. It's not a very big risk in my opinion, but it is something to consider when thinking about your risk profile when investing. Another thing is government crackdown, okay, so we have same places such as Turkey and other places that the governments of outright banned Bitcoin. All right, So you've also got to y up here. Is this something that you'll governments likely to do a still willing to take that risk. There are ways you can still purchase Cryptocurrencies by P to P it with other people. But obviously you want to be doing everything by the book in your country. That's something you've got to consider. The risks of governments cracking down on the currency. The reason I do it obviously is because it's a threat. If it wasn't a threat, they wouldn't have a need to do it. So that's the value, but that's also one of the risks that you have is that they want stifle innovation and force you to liquid at your positions, maybe when you don't want to write. Another thing as well as market risk, okay? So if you put in money in Bitcoin and it drops 80 percent, which has happened. And my guess is it will continue to happen again, It's a very nice and market. It's a very small currency relative to other currencies that are out there today. So you do see these big swings from when people buy and sell Because market, it doesn't have as much liquidity as say, what God does is gold is at a 10, $1 trillion market cap Bitcoin. I think he's positive trillion now at the time of this video. So when Paypal and bond solid, does it affect the price of bitcoin? Quite a bit. Okay, So you've also got that mock risk. If you put yourself in a situation way, you need that money and you might be forced to sell at a loss. Okay, So this was important to invest responsibly and dollar cost average and K at an appropriate amount that you can afford to invest without having to dip into it because you don't want to be doing that when you're sitting in a loss, okay, so it's very important that you invest responsibly and you understand those risks, okay? And another risk is because the Bitcoin protocol and this technology is quite near. It could break domain the console software or they could be a bug, or they could be something that, that makes it breaks or it could go to 0, that is a real risk, okay? So definitely keep that in mind when you're investing. Obviously, there's a real risk of your government-backed currencies, bangs a baste IK, and then being worthless as well. So everything has a risk. But this is a risk with people in that it could guard is 0. Okay? So I just wanted to get that across. And another risk is far as I can see it is if governments around the world decided to return to a gold standard. Because as we went over in one of the previous lectures in this clause, the money we use today used to be back bug goal, which is using jury finds an industrial goods of the coin. So there was actual value backing the currency. Sir, as far as I can see, Bitcoin will potentially not be worth much if the governments of the world do respond, decided to return to a gold standard. Okay, So that's another one of the risks that I've personally folded bat and then I want to come across to you guys just so that you can understand the potential risks. Of course, I recommend you look into it more so that if you think of other things, you can dive deeper into that. But that's it as far as I can say it. Mci. So our art that helps all of you guys out and we'll move on to the next lecture. 5. Is Bitcoin For Criminals?: So what have you guys might have heard the United Bitcoins for criminals and Emily, bad people use it because they can't be cooled by the place. And they sort of thing where I just wanted to spell this ridiculous nonsense right now. So if you think about the dollar itself, the EU's every single day. If you've got cash, just say you've gone down the string, you've taken out. If you bank account once you've actually got that cash, it can't really be tryst from then on GNI domain. So if you've got the cash, she can go maybe to have you want to mate, and no one's going to be able to track that transaction. Cash is much more anonymous than anything else. Because once you can, you can take it out somewhere and then no one knows when you do that outside of that, okay? Whereas bitcoin is worse than cash because they can track at the blockchain, can be tracked, they can older the block chain because it's publicly verifiable and say, Okay, here you spent on one. Okay? So just like how caches for normal citizens use it to go and purchase your goods via di their lives. It's also true that criminals use cashflow other things as well, and it's the same with Bitcoin, okay, So this is just stupid fat brains. We call in the Bitcoin community, we call people with those fiat brains, fat Brian thinking. The only thing I can put it down to is that they threatened by the Bitcoin particle because it threatens them and I'll play over money. So are criminals prefer to use cash if they do use Bitcoin, it's more easily to track them. Or enforcement agencies have actually said they prefer if criminals use Bitcoin because it's easy to find out who they are. So definitely it's for criminals, but it's an old paper, U2. So it's no different to the DLA in that sense. There's good people and bad people in this world. The hotness of money doesn't have anything to do with that. It's not some underworld doc place like the media and the governments would have you believe it is. Okay. 6. How Bitcoins Are Created: So we're just going to go over now how Bitcoins are created, okay, just so you can understand how the software works and how people combine solving currency, okay, so new bitcoins are generated by a competitive and decentralized process called Mani, okay? But the best way to compare these to gold. So when you mind gold, you have to go out and you have to dig it up. Okay? But picture mining Bitcoin is digital morning. So with high process LBD computers, okay, So the process involves basically individuals who are rewarded with network are rewarded by the network for the service. So bitcoin one is a basically processing transactions and securing the network using specialized hardware and just collecting new Bitcoins in exchange for that. Okay, So are they secure the network, which is rewarded by giving them more Bitcoin. Okay, So the Bitcoin protocol, it's basically designed in such a way that new Bitcoin credit at a fixed right? So this makes Bitcoin wanting basically a very competitive business. And our answer, when mom one is do join the network, it becomes increasingly difficult to make a profit. M1 is, they must sake efficiency to cut their operating costs. Sorry, no central authority or develop or has any power to control or manipulate the system to increase the profits, okay? Every Bitcoin and art in the world will reject anything that does not comply with the rules it expects the system so far, alright, so becomes a credit decreasing and predictable, right? All right, so it's going to predictable monetary policy, alright? The number of new Bitcoins credit HER is automatically halved or baton until Bitcoin issuance halts completely with a total of 21 million Bitcoins in existence. So at this point, bitcoin miners will pull, would be supported exclusively by numerous small transaction phase instead of relatively large ones as we say today. All right, so that's how the coins are created. If you look at the bullish case for that. All right, sir, to get bitcoin, there is actually work that has to takes place, okay? And the Bitcoin protocol is based on proof of work. So it's proof of work for them, honest because I have to solve complex computer problems to an Bitcoin themselves. And in proof-of-work mechanism is very attractive because purchase Bitcoin, you have to actually work, right? You have to go out in society, you have to work a job which will enable you to purchase the Bitcoin, which is very attractive when you consider the differentiation of that between today's society. So there is no proof of work required for a central bank to print money, okay, So there's no productive output in society for the money that they print. It's just to cause inflation and create monetary stimulus. Okay? So if you were to print money, you go to jail. But if it got central government, central bank prints money, it's cold stimulus. So you can say, you can see the jerk, their central banks and government and basically that jerk of the world when it comes to currency. And the things that they do to manipulate that and control that monopoly that I have over it. Okay? So the proof-of-work mechanism of Bitcoin to get a hold of them as well as the ETS cap supply is what makes it attractive and that is how you get bitcoin. So I hope you all enjoy that. Let's move on to the next lesson. 7. Inflation And Deflation: So what we're gonna Garvin now is one of the key issues with government-backed currencies, sir. I don't know if any of you've know much about inflation deflation and they sorts of things. So we're just gonna go a little bit hard for that now. And I'll explain to you further the value proposition and the bull case for Bitcoin as a currency reserve asset. Wars of internet currency. So with the current financial structure, with the government printing money and may sorts of things. As it shows in the picture, the value of your money decreases and they cost of goods increases. This is because they value that money every time they print more of it. It devalues the currency because they are printing money with no reproductive output in society to get that money. Okay? So what this does is it forces prices up because the value of that money is decreasing and process. So when you say processing craze luck, I'm sure many of you have seen over the last year, good luck houses, lumbar, bitcoin itself, all asset clauses, rent, coffee, you name it. This is due to inflationary pressure on the currency because governments won't up while I'd have in flighted the money supply. Okay? So this creates great class separation because the papal that actually already have money and assets, the papal little already fortunate off their asset processing, Chris, okay, and they can keep pace with inflation. But if you're a saver, you get wrecked and you get wrecked hard. Because when you're saving money with interest rates all the way down and inflationary pressure is going up, Okay? The money of usaid means becoming more worthless by the day. And banks these days not giving you any interest on that savings. So if you don't have assets, you'll just going to continue to get poorer, okay? Now, this only benefits very few people because even if you just your average middle-class person, okay, which I think in the next couple of years we're going to see the death of the middle-class. Even if you have a property and a gars ops I $50 thousand that year, while you're not going to really benefit from that, still rot because if you were to sell your house, you'll still going to have to go live somewhere else anyway, and you gonna have to pay all these taxes on top of the appreciation in the capital gains tax. So it doesn't really benefit you because when it goes up as well, you'll have lock, you'll property rights and you'll cancel rights depending on where you live, they'll shoot up in value while your pyrite will continue to stay the same. Okay? On top of that, you cost of living, willing grace because service, Jakarta, get your coffee to get your food. All of these things are just gonna keep going up and up and up and up. And the early, really the only real people that benefit than that of the top, top 10 to 20 percent of society, okay, everyone else sort of gets stuffed. I've about these sorts of thing. Now, the bullish case for Bitcoin is, is that it's a deflationary assets, okay? Because within Flash and it does cause high interest rates and the long-term. Logos exports because the high price of goods means that I've other countries of font it less attractive to purchase goods. Obviously lowest savings as well, because whatever savings you have, you're going to be able to save less because of that cost of goods increasing on top of that. Inefficient government spending is also lock, a really common cause of these inflationary pressure as well. Because we definitely know from experience that governments on really the greatest stewards of spending money the correct way, which also relates to tax increases, which if you're an American, I'm pretty sure you've noticed that Jerry bought and has put a proposal together to increase the capital gains taxes. Which really, it doesn't really help anyone. It just makes a society as a whole. Just generic, become a little bit poor, poor. And the key selling point HE, for Bitcoin is it's a deflationary outset. So with your traditional currencies, how you'll blind payable decrease over time. You'll blind palette increases over time with Bitcoin because the supply's kept and it's a scarce asset. If you look throughout history, old best forms of money had one K50 that was scarce, but not anymore, not with the DLA. Okay. So if you got you Bitcoin private keys and you put on the mattress 20 years from now, theoretically because the deflationary currency, you will receive your value increase or if it's on now. All right. Sir. Yeah, that's the caveat to that is in our theft in degrading the Bitcoin because no more can be made on lock, the currency that we have today. All right, it's not controlled by paypal that can change the monetary policy. If they were to do that in Bitcoin, you would need a consensus of all the WAN as an arrow for iot is that yes, we want to change the economic models of Bitcoin and no one is going to do that. The amount of consensus that you would need across the entire network to make these changes to the network is old but impossible, okay? So it just protects you from that. Our inflation that's ruling society and it's just a field as one of the main evils of the world where Bitcoin is, you'll protection of this erosion of your purchasing power. If it's on, it's nothing local investments, a lot of people want to get into nice and markets like this to get rich quick. I encourage you to not look at it that way because a lot of people put in money they can afford to lose as an asset or a baton that will appreciate lock, anything else you're going to see variable will tell swings. This is not financial advice. Obviously all investments have risks. Holding cash has risks as well. But this is just that bit of your portfolio that you can put in whatever you want. 1%, 10 percent of your portfolio into a currency that has the economic principles of deflation, which is going to increase your purchasing power and hopefully improve you'll often a positive way. Okay, so I hope you learned something and we'll move on to the next lesson. 8. Is Bitcoin a bubble?: Now the answer to their common question is B coin a bubble. Well, for all financial assets, basically enter and exit bubble territory, territory all the time. A lot of times the DLA, even now can be considered a bubble as I've inflated the supply. So the dollar you spend every day, a lot of people could look at it as the stock market being in a bubble because the economy right now is doing worse than it ever has and yet stoked to hitting all-time highs. Bitcoin can be seen as a bubble right now because it has gone up about 600% in the past year. Probably even more. So whenever you see an asset in our go up like that, It's a lot of the times, yes, it is a bubble. Bet. It comes down to the fundamental value. And because Bitcoin is Hadza value for a little Paypal and it's a very new technology. It will go through. They sort of walk hot cycles as its lot, a lot harder for people to value as I learned about the value proposition of that particle. So at times you'll find Bitcoin is in a bubble and that Tom u4 and it's not in a bubble. If you are a long-term investor, investing in a bubble isn't necessarily a bad thing, okay? The tone value of your money obviously is important. So if you put in $1000, even if you plan to hold that for 10 years and you water drop 80%, while you probably could have allocated that capital at that time in a beta asset that wasn't bubbly at that specific time, sir? Yes, Bitcoin can have bubbles just like other asset classes can have bubbles and this isn't something to be too concerned about. My shirt tried. Oh, okay. So if you're a long-time investors, investing in a bubble shouldn't necessarily concern you if you value its future value at a high evaluation than its current value. Okay, so I hope that makes sense. 9. Quantum computing Threat: So we're just gonna go on quantum computing now and the risks that they saw poses against the Bitcoin particle. So our quantum computing and computers, uh, basically supercomputers, okay? So our picture, we'll compute our ad harm and how smart that is and times that by 10 thousand. Okay, So the theory, a little Paypal piracy is okay once quantum computers are strong enough, they, because they're going to be much smarter than humans, you and me, is that that will be able to break Bitcoin software and cracking and people's private worlds and still have fun, sorry. Marsh systems rely on cryptography. And quantum computer could theoretically and most likely crack cryptography and basically destroying the security of the network in theory. In general, these include black banking systems in the world as well. So quantum computers are also risks through the banking sector. Obviously if what we use every, every day, sorry. However, quantum computers darn block exist as of yet, and they probably weren't for wall. So in the event that quantum computing actually does price an imminent threat to Bitcoin, the protocol could be upgraded as with Parse quantum algorithms, okay, because you've got on one side the quantum computers working to destroy Bitcoin and the other slide quantum computers can be used to strengthen the networks are today's forces against HIV, um, and it's just going to neutralize each other out. Okay, so given the importance of this update would have the updating to quantum algorithms on the Bitcoin network. It can be safely expected that it would be highly reviewed by developers and adult the boil bitcoin uses to make sure that the security of the network is maintained over that time. So initially in 2017, this was something always sort of concerned about, but obviously, once you look into it more, that doesn't really appear to be that big of a consent from anymore. I encourage you to look into it you solve, but I'll just sign say the spaying a threat to security in the long-term. Hope that helps you out. 10. Can Users Collude Against Bitcoin: So we're gonna go over now if it's possible for users to collude against the Bitcoin networks or it's not exactly possible to collude against the Bitcoin protocol that easily. Okay, So any Bitcoin client that doesn't comply with the same rules cannot enforce their own rules and other uses we can in that network. All right, So as per the current specification, double-spending is not plausible on the same block chain. And neither is spending Bitcoin without a valid signature. So it's just not possible degenerate, uncontrolled amounts of Bitcoin out of thin air, Spend other uses, funds corrupt the network or anything similar to that. All right, So however, the PAL from wine is can arbitrarily choose to block or service race and transactions. But a majority of users can also put pressure or for some changes to be adopted in the network. Due to the de-centralized NIJ, I guess it would be potentially possible that Holly I LAM, luckily, the users could put pressure on I've run to make changes to that specific protocol is Bitcoin only works correctly with the complete consensus between all users. Changing the protocol can be extremely difficult and requires and an overwhelming majority of users to adopt the changes in such a way that remaining used to have nailing no choice but to Fuller. So as a general rule, it's hard to imagine a scenario where this would actually take place, alright, Todd, to imagine people adopting any monetary changes to that technology. Considering the reason why they've purchased and helped maintain that network in the first place is due to its current economic properties. So and the economic incentives that the Bitcoin network basically incentivize people to try and destroy it because it's far more beneficial for papal to contribute to the network. It costs them more money to try and 51 percent attack Bitcoin. Then what it does to just contribute to the network and keep it running and they can just be benefit with morning or world. Sorry. I didn't see a scenario in which these types place. Even if governments of the world decided to alert and 51 percent attack Bitcoin, that amount of power for them they'd be able to do that is would cost them a lot of money. Okay. Yes. Don't want do it, but I can't see them being successful even if that were to try and do is our Bitcoin is a nested amassed, enormous hash pal and security over Taiwan and say it happening. Okay. So I hope that answers your questions about collusion or any concerns around that. Okay. 11. What I Think Bitcoin Is Worth: Just gonna go over now what I think the coin is worth in regards to market cap relative to other scarce assets and commodities, okay? So SSH, so things such as gold, silver, copper, aluminum, they sorts of things. Okay. So to understand and get a picture of what I think Bitcoin's with. I want you I want to just sort of explain to you the characteristics that made me think, get to these valuations. So gold's market cap in the global economy is about ten to $12 trillion at the very moment, okay? Now, a lot of that is imputed, meaning people are just deciding to buy it because of its monetary properties as hard money, okay? Now, bitcoins calm mock copies of 1 trillion. Now I think Bitcoin just as if you have the store value narrative for this asset. It is at least as good as gold and that is a conservative estimates are, I think it would be reasonable and conservative to say that the coin will overtake and ate away golds market cap of ten to 12 trillion. So that's another non bet, another nine to 11 trillion from its market cap of where it's currently sitting today. That doesn't mean that there isn't going to be swings and it's going to be a bumpy ride because I think it will be. And you're gonna see a lot of governments messing around we sorts of things. Because it's not only a threat to a store of value and our narrative, but, uh, it's sort of a threat to separate money in state. So how will go to this is okay if you look at the traits of money, verifiable, Bitcoin is completely a 100 percent verifiable monetary policy is, you know, how many coins there are exactly. Gold has a moderate verifiability because although Gaudi's is scarce asset, okay? We don't really know how much gold there actually is, okay? We do know there's not a lot of it, but no one can tell you how much gold there is in-house gas that actually is. Plus on top of this, there's AIML mosquitos going into space and there's lots of asteroids up there, which I've known to have gold in it. Now this might seem crazy to want a paper and I, it's pretty out there, but the why technology is progressing. I don't think gold is as scarce as what people think it is, especially when technology develops and we're able to go into planets ARE it's, you know, Gotye scarce because he's completely scarce. Okay, So it's better than that in regards to verifying how much supply is actually out there. Okay. Fungible. Okay. So interchangeable. Gold and Bitcoin? Yes, that birth interchangeable black with black fungibility. Okay, So there are bad on level footing there. Then he has true portability. Okay. Bitcoin is extremely portable, whether you have 10 or $1 million, you can carry it around with you in a ledger device, which is about the small, alright? And you can cross borders and no government can stop you. You cannot cross the border with a billion dollars worth of gold in a little device like this, okay? It's just, it's just not plausible. Plus you have to pay to store all of that gold, ensure it. It's an absolute nightmare. Okay, So in regards to portability, Bitcoin is way better than golden these aspects, the visibility, okay? Bitcoin is infinitely divisible. We'll see do not have to pay for an entity to IB coin infinitely divisible, whereas gold is very hard to divide united, there's rocks to shave off little. Paintings of the gold is just not very bad because he's completely scarce. Then only thing Bitcoin really doesn't have a going for. It is an established history, whereas gold has been a store of value for thousands of years or on human society. But when you look at Bitcoin and you could walk forward, forward thinking technologies and where the world's going to me, it's sort of, it's very obvious where the world is heading. And Bitcoin has a shot at replacing banks even, okay. Sorry, when I look at the fugal, just don't say Gold is as being that anymore in our domain. Because he's completely censorship resistance. So it's an anti fragile technology. Even if governments ban it, you can still be trying to P to P and pseudo anonymously. So are we not. When I look at these things in the decentralized nature of the network and it not being able to be controlled by a single person. Just those properties alarm and it is at least at a minimum at par with gold, which we'll put it at a 10, $1 trillion market cap thing. Conservatives are, there's 11 aspect of it. So conservative, conservatively speaking, I'm going to say, okay, that's a, that's a, that's a 10, $1 trillion market cap asset, okay, as it regards for what it's worth. And now things are being built on top of Bitcoin like smart contracts. Okay? So lochia theorem, we, people are trying to build the decentralized finance world on top of Bitcoin particle as well. So when I look at archive Bitcoin of its asset, asset by itself as it today, I think it's going to store a value narrative of goals. So that's 10 trillion. If decentralized finance is able to be built on top of Bitcoin as well. The banking system will be completely gone. And that market cap could be anywhere thirty trillion dollars. Forty trillion dollars, of course, because if you just look at, let's just say the entire market cap of one of the banks market caps these days. Let's have a look. I'm just going to get at Google. So this is just an Australia come off bang a 159 billion. So old days other banks That's about 300 billion lot there if you take it all the banks in the world that's at least 20 trillion, right? I may not have all the countries that we've got. So you're probably looking at a $30 trillion market cap, at least. So conservatively speaking, when taking all of this into account, I say it's a minimum 10, $1 trillion asset. Now, building decentralized finance on top of Bitcoin is going to be a little bit difficult because it's an older technology. But there are some of the smartest people in the world, little wacky on the size we spake. And so that's where I say it at a conservative estimated about attention window Mock kept. This isn't financial advice. Go investments have risk. That's just how I'm valuing these protocol at the moment. And obviously I say Furda upside in the future, if developed, was I able to develop these decentralized finance and smart contract capability on top of the Bitcoin protocol, okay? 12. Final thoughts: Thanks everyone for going through the claws, my bullish case for Bitcoin, but let me know in the projects area, what do you think? Do you think bitcoin has value? Do you think it has a future? Or do you think Locke me that it already is here and it's here to stay. I hope you learned something and I hope it was very educational for you. I want you to check out the project section if you lock the way some questions in there just to say if you show that you've learned something and something, sticks and omega watch things a few times for it to click. So feel free to go back to the stop. Watch this again are a few times just so really clicks. And if there is any questions, just feel free to put it in the discussion area. I'm happy to help you out, take care, and I'll see you a letter.