There have been so many new entrants into the digital assets space that come for speculation and dreams of getting rich quick. Bitcoin was built for freedom. For this reason I thought it appropriate to start the Blockchain Global Capital blog out with an explanation of what crypto is, the culture of where it came from, and why it is vitally important to living in a free society.
To understand the backdrop of what was going on in American society at the time, it was post 9/11 when the Patriot Act was passed and the government had almost unlimited access to spy on it's citizens, not just in the US, but globally. Around this time The EFF (Elecrtonic Frontier Foundation) was formed and created a browser built off Navy and MIT research called the TOR browser (TOR- The Onion Router). This browser for the first time allowed brosing of the "deep web" and also allowed for privacy so that it was much harder to be survielled and tracked as you browsed everyday websites. At the same time other tools became more mainstream such as VPN's (Virtual Private Networks) that allowed you to mask your IP signals and "browse from another country or location". Most American's are unaware that we live behind a massive firewall much like China, and our access to the global, free web is actually limited. In addition it iseasy to look up somebody's physical location via their IP address, so masking it can protect you not just in the digital world, but the real world as well. The last tool in this suite before getting to Bitcoin was PGP. PGP (Pretty Good Privacy) had been around for a long time but is essentially a cryptographic hash that allows you to communicate securely with Public and Private keys. Bitcoin works similarly with SHA-256.
How PGP Encryption Works
Then came 2008. You all probably remember the financial crisis that ensued, the housing crash, the propping up of big banks with taxpayer funds, and the Occupy Wall Street movement. Out of this Bitcoin was born. Nick Szabo and others had been previously working on using cryptography similar to PGP to create a digital peer-to-peer (P2P) cash system, and then the Bitcoin Whitepaper was released later that year in 2008 by an unknown person or collective. It first went live in 2009 as a direct response to our government's devaluing the nation's currency. We have witnessed more surveillance and more printing by Central Banks around the globe since 2008. Yet the beauty of Bitcoin is it is an open source project, meaning it is free and widely available. Anybody who downloads the software can particpate directly regardless of any censorship attempts. As long as the internet is running, Bitcoin will be running as well.
The interesting thing is the combination of properly using Bitcoin, TOR, PGP, and a VPN enables anyone and everyone that is willing to learn, will find a digital path to privacy and the ability to truly secure his/her wealth from an increasing number of threats in an unstable world. We have come a long way since 2008, but just like the internet was built on protocol layers such as TCP-IP, SMTP, HTTP, etc. The new layers of the web will be of a global, decentralized nature. This however gets deeper into other protocols such as Ethereum or Polkadot and the Dapps that live on top of them. These are all the beggining blocks of what is collectively known as Web3. We will dive into that later.
The final piece in securing your Bitcoin after understanding the measures needed for privacy, is to understand the difference between a cold and a hot wallet, and the pros and cons of each. In the diagram below the software and web wallets are considered "hot wallets" as they are directly connected to the internet. Hardware and paper wallets are considered "cold storage" as they can not be directly accesed as they are stored offline.
You may have heard the slogan "not your keys, not your coins" What that means in essence is if you do not control your Private Key and Seed Phrase then somebody else does. If you have trust in that third party, then great, if notthen they would have access to your funds at anytime.
My first experience with Bitcoin was sometime between end of 2013 and early 2014. At this time I had a use case for Bitcoin, but there was not a lot of information out there on how to navigate scams and UI/UX (user interface) was extremely lacking. I learned to trade Bitcoins with "Local Bitcoins" doing in person trades and various exchanges that were around at the time. At this time I was learning how to properly use bash for writing the scripts needed to process real BTC transactions on the command line of my copmuter terminal. You had to send and recieve UTXO's (Unspent Transaction Outputs) and sign with your Private Key (Like in the PGP diagram). We have come a long way from then, but it is important to understand where your money is being stored, how it is being sotred, and who can see what. Remember Bitcoin is a PUBLIC LEDGER.
For new entrants just remember- learn how to send and recieve transactions to different addresses and learn how to protect your seed phrase and keys while your accounts are small. Until you are confident and ready, it is likely better to get the assistance of a professional service to ensure your digital assets are safe and secure. We will have follow up posts on all the basics to get our investors up to speed, from security to new coins and ecosystems to setting up accounts and exploring the landscape.