Rapp Report episode 211
How to get started with Bitcoin is the topic of this episode. Welcome to Andrew Rappaport’s Rapp Report, where we provide Biblical interpretation and application! The show is a ministry of Striving for Eternity and the Christian Podcast Community. In today’s episode, host Andrew Rappaport is joined by friend and Pastor Jim Osman of Kootenai Community Church in Idaho for part two of the conversation on bitcoin started in the last episode! The hosts of the Bitcoin and the Bible podcast – Dave, Simon, and Will – join us again to discuss bitcoin, focusing today on the practical side of starting to use bitcoin.
Before turning to practical advice, though, Jim asks what will keep bitcoin from inflation or from dropping in value. Will explains that people continue buying bitcoin because it’s a superior form of money, and they will ultimately have the ability to consume all available bitcoin supply. This dynamic, grounded in the fact that value is subjective and based on market needs, listeners can be assured that the value of bitcoin will not go to 0. With regard to inflation, Will describes the way that bitcoin operates with a hard cap of 21 million, and how the bitcoin system is designed with a kind of self-regulation because it’s in every bitcoin holder’s best interest to hold others to the rules of the system.
Turning to some possible concerns and responses to them, the group first considers whether or not the bitcoin cap will pose a problem. Even when the cap is reached, there will be plenty of bitcoin and sufficient divisibility to ensure global commerce can exist on a digital system. And while some people are wary of bitcoin’s fluctuations in market value, the current fiat system is over-engineered to avoid volatility. Volatility, however, is a sign of life, and actually provides a reason for us to trust bitcoin! The change in the bitcoin market is rooted in the fact that the market is free and open, and so at each moment, the dollar price of bitcoin is determined by willing buyers and sellers. While the primary reason people put their money in banks is to be able to move it digitally, bitcoin facilitates this movement even better than banks; it allows for the transfer of money without bank control and with great speed.
As the conversation progresses, the group considers what bitcoin mining is. At its most basic level, this mining involves grouping pending transactions into a block and finding the random number to make the block valid. The process leaves a track of work that demonstrates the history of transactions and is done with a specially purposed computer. The sort of computer required to mine (an ASIC miner) helps to bolster the security of the process, and some bitcoin users have also elected to study quantum computing, which is expected to protect bitcoin in the more technologically-advanced future.
Dave, Simon, and Will encourage listeners to lean into bitcoin rather than other cryptocurrencies, and the next topic of conversation is the rationale behind this selectivity. Some cryptocurrencies are trying to be money, and others are not doing so, and in general, money wants to converge on a single best form of money. At this point, bitcoin is the predominant form of digital money; the choice cycle pushes bitcoin value up and down, and the positioning of bitcoin at the pinnacle of the cryptocurrency world gives it a lot of security. Other forms of cryptocurrency don’t work well because the incentive behind them (the driver of crypto outcomes!) won’t work, and some of them are even built of systems that allow the rich and powerful to rewrite the rules.
Now, assuming a person is convinced to give bitcoin a shot, the glaring question still remains: How can someone get set up on bitcoin? Fortunately, there are great resources (including a Startup Guide and many others on BitcoinandtheBible.com!) to help lead the way, and though there are things to learn, the process is not as difficult as it might seem. The work of learning offers great value, including security for personal finances and opportunities for Christians to ultimately educate their families, transfer both wisdom and wealth to the next generation, and practically love others in monetary ways.
The simplest way to begin is by setting up an account with a company that facilitates the purchase of bitcoin. This sort of account requires access to some of a user’s banking information, though, so would-be users must first determine what level of privacy they require. If they decide to set up an account, Dave, Simon, and Will encourage them to stick with companies that work with only bitcoin, rather than with various forms of cryptocurrency. For relatively small transactions, a company like Strike is a strong option, and users may simply take money from a bank account and buy bitcoin. The bitcoin will be in the custody of the company facilitating the purchase, but the next step in using bitcoin would likely be using a phone or cold wallet to take personal custody of the bitcoin. Contrary to common fears, losing a phone or other device with bitcoin on it will not spell the end of the money! Bitcoin resides on a network, but a device, so it will be accessed using a backup phrase from different devices.
For now, in the United States, bitcoin is treated as a capital asset, and functions as a savings technology. People can buy and hold it for the time being, and can easily go between dollars and bitcoin (though transferring from bitcoin to dollars must be reported on taxes). But the bitcoin space is growing with regard to the financial system, and bitcoin is already starting to impact lending and purchasing spaces. Now is the time to seek education on bitcoin, because it seems inevitable that we will at some point transition from our current system – a debt-based Ponzi scheme – to a bitcoin standard. Bitcoin will, it seems, follow the trend of other growing technologies; demand and cost will rise, and it will eventually become the hard money that drives other money out. El Salvador has already accepted it as legal money, and Dave, Simon, and Will expect to see the US and other nations follow a similar trajectory!
The conversation wraps up with specific resource recommendations, an encouragement to educate oneself about bitcoin in order to help lead others, and a final personal commendation of the guests. Be sure to tune in next time as we take on the topic of angels!
0:31 – Welcome to today’s episode – Part two with the hosts of Bitcoin and the Bible!
2:47 – Conversation kicks off with questions of inflation and value loss.
7:55 – With a hard cap of 21 million, will there be enough bitcoin?
11:55 – Causes of volatility and how digital money transfer is better with bitcoin
16:16 – What is bitcoin mining, and why is bitcoin the best cryptocurrency?
26:52 – The discussion shifts to getting started with bitcoin.
38:46 – Bitcoin’s place in the world of currency, and the problem of today’s financial system.
49:14 – What will the future of bitcoin look like?
50:53 – The guests offer book recommendations.
53:45 – Final commendation of the guests and their resources, and a plug for the next episode!
Listen to part 1 of this two-part series: What is Bitcoin?
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Learn more about Jim Osman.
Check out Bitcoin and the Bible.
Access the specific resources mentioned in the episode: