Bitcoin

Bitcoin is a fascinating invention and one that I am trying to wrap my mind around.  Not simply for Bitcoin, but the entire idea behind its underlying protocol: the blockchain.  According to recent polls, millennials aren’t investing nearly as much as earlier generations.  This make sense.  They are older and have money and most millennials today are saddled with student loans and having seen their parents go through two market crashes.  First, the tech bubble of 2000-2001 and then the financial crash from 2008-2009.

However, it seems that the few areas that millennial are investing (and I should mention I hate the word millennials and this is a generalization) is in Snapchat, avocados, and Bitcoin.  I rarely use, but I understand Snapchat.  I own a few shares and don’t know how they will make money, but it’s a prayer that Evan Spiegel can monetize 175 million users and becomes more Facebook and less Twitter.

I get avocados.  They are delicious.  ‘Nuff said. (And it’s a joke.  Not literally buying and holding avocados.)

Bitcoin, on the other hand, confuses the shit out of me.  I’m not the only one.  Howard Marks, one of the greatest money managers of all time, recently wrote a memo on how Bitcoin doesn’t exist.  It’s nothing, which is in a way true.  However, neither is any contract or currency without the belief that it is a real thing.  That is does exist.

Bitcoin was created by Satoshi Nakamoto.  Now what is interesting about Satoshi is that we don’t know who he is.  Or she.  Or maybe they.  It could be a group of programmers who have stayed anonymous and are sitting on billions of dollars worth of Bitcoin.  Or is it billions of Bitcoins worth in dollars?

To get started, I wanted to go as close to the source as possible.  Luckily, Nakamoto wrote an 8-page memo that outlines what Bitcoin is and its significance in a concise and easy to understand way.  If you are interested in learning about Bitcoin, read more below.

Bitcoin: A Peer to Peer Payment Electronic Cash System