Bitcoin Q&A !

 

Over the past 2 years, I’ve answer to many of your questions. Here you can find short resume of them.

Finance

What is the minimum to invest in Bitcoin?

5 hours. No minimum in monetary terms, but spend at least 5 hours studying Bitcoin. Try out the technology with a 5 euro transaction with someone you know. You don’t want to die a fool. For the investment, the hardest thing is to start, so you can simply go at your own pace, starting with 10 euros a week or 20 euros a month. You will adjust with time and your confidence in yourself.

For a video summary : click here

When to sell your Bitcoins?

No one can predict the price. No technical or fundamental indicator can. There is no magic answer. If you are not ready to see your portfolio lose 80% of its value or you need the money for important things, you need to lighten your position. Wellness comes before greed.

For a video summary: click here

 

Where does Bitcoin fit in a financial portfolio?

Bitcoin can fit as a non-correlated asset in your financial portfolio. So a 1-5% allocation is not too crazy. Think of it as insurance against inflation and central bank madness. CAUTION, bitcoin remains very volatile and risky.

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Mining, inflation or deflation?

The creation of blocks every 10 minutes by miners produces monetary inflation (adds new Bitcoins in circulation up to 6.25 in 2021). Bitcoin has a deflationary nature, because its number is limited to 21 million with decreasing money printing. I’m talking about the currency here, not the price impact.

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Why a Halving every 4 years?

We don’t know. Bitcoin money creation is halved every 4 years or 210,000 blocks. This is called Halving. The exact reason is unknown, my hypothesis is that Satoshi wanted to create cycles, both human and technological, to allow the industry to grow gradually.

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Forgetting your Bitcoins for 10 years

It’s possible, but be careful: make a note of where you left them, use steel to engrave your private key and not paper. You can use a multi-sig system. The risks of losing your bitcoins are very high so don’t be a fool. The best thing is to continue to evolve your security over time.

For a video summary : click here

 

Become a whale on Alt-coins?

Dreams are cool, but be careful not to get burned. You have a very, very slim chance of picking the next big project and even less chance of it succeeding in the long run after the bull run/pump. You should pay attention to the small cap and focus on Bitcoin, even if the price is “high”, it’s not too late. Bitcoin is still in its infancy.

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Paypal, Reconfiguration, $12,700 BTC

No Paypal has not launched the bullrun of 2021. The confinements can play into the price via monetary injection from the states, questioning confidence in the system, an increase in amateur trader activity and a Wall Street panic. Nobody can know when to buy.

For a video summary: click here

 

Should you buy if the price drops? Bear VS Bull

Yes, the whole logic of a DCA solution is to smooth the price over time. So you have to continue if the market goes down because you are aiming for the very long term. If the price goes down, you will have more bictoin for the same euro value each week. We can then say that you accumulate stock.

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Send Bitcoin to Revolut?

You cannot send bitcoins to Revolut or even withdraw them. Revolut is a bank with a closed system. These are not real Bitcoins and you do not hold the private key. Be careful if you go through this kind of platform.

For a video summary: click here

 

Is Bitcoin pegged to the dollar?

No, Bitcoin is free and not pegged to any other state currency. It is the global supply and demand that drives the price. The exchange rate to USD or EUR varies. Just as the EUR/USD exchange rate changes daily, Bitcoin can be denominated in anything.

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Selling a very large sum

If you plan to make a cash out, you must plan your exit well and contact an accountant and a tax expert. Tell your bank or secure your assets. Make sure you don’t play with your emotions and act rationally. Make a serious plan with a strategy for your money. Taking out millions of dollars for nothing is not necessarily logical, plan a diversification and contact a financial advisor.

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What to expect at the end of a Bull Run?

The end of a Bull Run is often characterized by high volatility. There are many newcomers who want to make money without knowing anything, the euphoria is at its peak. There is a sale of whales and a withdrawal of investors, miners sell their coins instead of HODL. There are no more buyers and boom, major trend change. For several months, people are still nostalgic then the reality falls, the price does not go back up, it is the beginning of the Bull Run.

tre bear market non ?)For a video summary : click here

 

Diversification in your Bitcoin portfolio

A financial portfolio needs to have some diversification to reduce market volatility. In this logic, we look for assets that are not correlated with each other, and Bitcoin is an interesting choice because of its anti-fragile characteristics in relation to the traditional system. A low allocation is therefore not stupid next to bonds, primary business, corporate actions and real estate.

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Which cryptocurrency(s) to choose?

This question comes up a lot because there are so many of them. The first thing I can tell you is to invest in Bitcoin because it is the only crypto that offers a long-term strategy. The second thing is don’t listen to anyone, not even me. If you are looking to invest in this world, educate yourself, study the market and understand the importance of properly securing your assets. Don’t make the mistake of doing as this or that YouTuber or influencer, think for yourself. You can put your money in several cryptos but make sure you have a long-term strategy and choose the right assets. And be careful not to FOMO, there is no rush!

Wallet

Is one private key per house realistic?

No, but we can hope to have a large enough minority to guarantee our rights of possession. If one person per family holds the key, or about 20% of the population, then we will have an important path to the future of privacy and financial sovereignty of our nation.

For a video summary: click here

 

Can we find your private key by chance?

Yes, but the probability is so low that it is impossible. Even if all the computers in the world tried at the same time, the universe would be destroyed before the attackers could find your private key. Today, finding 24 words in order is mathematically impossible.

For a video summary: click here

 

What is a "custodial" service?

It’s a third-party bitcoin storage service. Just like a bank stores your money, specialized companies or exchanges can store your Bitcoins for you. This is very risky and destroys the whole aspect of sovereignty that Bitcoin brings. You have risks of hacking, confiscation and loss of privacy. These should be avoided as soon as possible.

For a video summary: click here

 

Reuse a Bitcoin address?

No! Avoid it when possible. Reusing an address is a bad practice to have. It’s not good for your privacy, as it makes it easier for anyone to track your savings or daily spending. It is always better to use a new address for each use of your wallet.

For a video summary: click here

 

Can I get my Bitcoins back if my cold wallet is stolen?

If you have your mnemonic (a list of 12 or 24 words), then yes. You need to recreate a wallet from this list of words and then you will get your money back. At this point, I would advise you to move the money to a new wallet in case the thief one day manages to crack your now compromised cold wallet.

For a video summary : click here

 

Will we be able to crack Bitcoin with a quantum computer?

No. We are very, very far from this problem and the solutions will come with time. Moreover, the day quantum computing comes, we will have other, much more serious problems like securing nuclear codes, all government data, etc. So not too much stress. When the day comes, Bitcoin will indeed have to make a Fork.

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Risk of burglary

The risk of burglary is indeed higher if it is known that you have bitcoins. So you have to be careful about the potential risk and keep your bitcoins safe and use passphrase systems. Also, privacy is your best shield: don’t tell anyone you have bitcoins and don’t give out your address. Have your security-sensitive products delivered to your place of work or to a relay point.

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What happens if Ledger goes bankrupt?

We lose a French unicorn. Concerning your bitcoins, not much. They are secure on the ledger and will remain so even if the company goes bankrupt. You can always transfer your bitcoins to another wallet. With the mnemonic phrase (list of 12 or 24 words), you can also recreate your wallet on other media like Trezor or Electrum.

For a video summary : click here

 

Change your security if you need to!

With the price going up, you need to adapt your security and implement more resilient systems. You can go with a passphrase or a multi-sig system if needed. You will find all the necessary information on this site.

For a video summary : click here

 

Ledger or Trezor?

Both are very good and do the job. I prefer Trezor for beginners because of its more intuitive interface, but Ledger offers more options. The two can go together for better security. If you’re more hardcore, I’d advise you to go for a Cold Card. Whatever your choice, we have made some tutorials :

  • Ledger tutorial
  • Trezor tutorial
  • Cold Card tutorial

For a video summary : click here

Engrave the list of 24 words in steel

If you are securing large amounts of money, paper is no longer enough to secure your bitcoins. You have to engrave these 24 words in steel to be sure that they will stand the test of time. To do this, ready-made solutions exist. Otherwise a home-made solution is possible for a small fee.

 

This solution is accessible to all with a blockmit, you can find our tutorials here.

For a video summary : click here

 

Legal

What taxes in France in 2020?

30% flat tax for individuals on your realized capital gain. So if you sell your bitcoins for euros, your gains are taxed at 30%. Actually it’s more complex than that since it will vary depending on your activity (miner, trader, etc…). I strongly advise you to talk to real experts (accountant, lawyer)

Come check the legal section (for your own country)

 

What if Bitcoin gets banned?

The Bitcoin network cannot be stopped. There are too many nodes, too many users and too much infrastructure. On the other hand, states can always make dictatorial laws to ban Bitcoin, put its users in jail and try to stop the movement. This is doomed to fail in the long run and will simply delay the inevitable while impoverishing the population. It would cut off innovation and set this nation back on a global scale.

For a video summary: click here

 

What power does the law have over Bitcoin?

The Bitcoin protocol cannot be affected by the law, only the user can be. No judge has the power to stop Bitcoin or cancel a transaction. Censorship cannot exist, because it is the nodes and miners who have control over the network. If a court, a judge or a dictator decides to stop Bitcoin in his state, only his people will be affected. You can arrest, kill, torture users, but never stop them from using an open source solution on the Internet.

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Accepting bitcoins in donation (3 solutions)

You can simply accept bitcoins through a receiving address, so any wallet will do. To have more privacy, I invite you to set up a BTCPayServer. Other solutions are also with Paynum (via Samurai) and if not via Lightning Network directly.

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Make a Bitcoin donation for a newborn

A fun gift idea for newborns is to give satoshis! The child will be forced to HODL for years and will have a safety net once they reach adulthood. To do this you can give him an open dime, a hardware wallet loaded, the private key to a wallet. You will have to make it legal or look at your country’s law regarding donations. Be careful, keeping bitcoins for 10-20 years is not necessarily easy.

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Technology

Taproot

Taproot is a bitcoin softfork planned for 2021. It will allow the optimization of the size of transactions, an increase in privacy and the integration of schnorr signature. It is complex and its activation advocates the debate LOT=TRUE or LOT = FALSE.

For a video summary: click here

 

What is a Bitcoin node?

A Bitcoin node is the Bitcoin software that runs on your machine. It has 100% of the history of the Bitcoin blockchain, receives and sends new transactions, and provides the consensus of the network. This makes us sovereign and therefore a contributor to the security of the network. The nodes make Bitcoin decentralized.

For a video summary: click here

 

Copy and paste Bitcoin?

Since Bitcoin’s code is open source, anyone can copy and paste Bitcoin with 1 click. What can’t be copied are the users, the 12 years of trust and the infrastructure around it. So copying and pasting Bitcoin doesn’t do much, because it’s the network effect that is most important.

For a video summary: click here

 

Mining fees

The mining fee is decided by the user on his wallet at the time of creating the transaction. He will choose fees according to the market and network congestion. The more fees there are if the network is full and the user is in a hurry, the less fees there are if the user has time. Miners will be paid to enter a transaction in a block, depending on the demand.

For a video summary : click here

 

Who to follow to stay on top of Bitcoin developments? 📚

The best Bitcoin resources are on Bitcoin Twitter, there are also newsletters to follow (link under the summary video). The Bitcoin library on this site is also a good database to go further. Finally, since the code is open source, you can read the Bitcoin Improvment Protocol (BIP) of the programmers.

For a video summary: click here

 

How to get started with the Lightning Network?

Let’s take our courage in both hands and go for it. For the theory, the Fanis training on the Lightning Network is very complete. There are also books and documentations available on the Lightning Network page of this site. For practice, the Bitcoin Node Training #2 will have you creating your first channels.

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Philosophy

What book(s) should I read about Bitcoin?

  • For investment in general: Rich Dad Poor Dad by Robert T. KIYOSAKI
  • To understand Bitcoin: The Internet of Money, Volume 1&2 by Andreas M. ANTONOPOULOS
  • To understand the future: The Bitcoin Standard by Saifedean AMMOUS
  • To help your children : Cryptoasset Inheritance Planning by Pamela MORGAN

Check the bookstore in the “Resources” section !

For a video summary : click here

Are CBDCs a threat to Bitcoin?

“Central bank Digital Currency” aka the e-euro/ e-dollar are the future digital currencies of central banks. They are a real threat to human freedom, privacy and the future of the free market. They will give absolute power to central bankers over monetary transactions and human welfare. A CBDC is the ideal tool of any dictatorship that will allow perfect mass surveillance.

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What happens to the "lost" bitcoins?

Nothing, they remain lost forever, no one will ever be able to move them. Think of it like pirate gold lost at sea. The end result is that all the other bitcoins are more valuable, as we reduce the amount in circulation. To quote Satoshi: “it’s an offering to the rest of the users”.

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Which crypto group to follow to have a bright future?

Don’t trust anyone, invest in yourself. Youtubers or influencers who promise you the moon should be avoided. Beware of scams and scammers. The best content is often free and experience is a master among masters.

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What is Bitcoin backed by?

Nothing. All the world’s currencies are backed by nothing but the trust that users place in them. For Bitcoin, it is the collective trust of 100 million users in the Bitcoin protocol code. This is what makes it so strong, compared to state-owned currencies where trust rests in the hands of a limited group of central bankers.

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Bitcoin is complicated!

Yes, it is! Bitcoin can be very simple if you do something simple like a one-time recurring purchase solution (DCA) on a wallet. But it can also be very complicated if you take on LN (Lightening Network), RGB or other much more complex solutions. The rabbit hole is bottomless. Don’t panic, our training courses are here to help you get started!

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Spend your bitcoins or keep them (HODL)?

Everyone is free to choose. The rule of thumb is to buy back the Bitcoins you spend so you don’t feel bad if the price goes up 10 times. Spending Bitcoins is good for the ecosystem because it contributes to the circular economy of Bitcoin. It supports small businesses and keeps the coins flowing.

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Explaining Bitcoin to no-coiners

The first step is to understand the personality and expectations of the person you are talking to. In general, the comparison to digital gold works well: there are 21 million Bitcoins, so it’s rare, so it has value. The second step is the ethical and philosophical aspect of Bitcoin: providing a bank-independent financial solution for 7 billion people. You can also show it directly to people with a physical demonstration. Most likely some people just don’t want to understand, sometimes you have to let go.

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My opinion and question about me

Bitcoin bank cards?

Bitcoin bank cards can be used to spend bitcoins anywhere in the world (like a Visa). That’s convenient, but it’s not what Bitcoin is all about. You go through banking intermediaries, you don’t give bitcoins to the merchant and you simply sell your bitcoins. Personally, this is something I avoid (plus watch out for taxes).

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Why don't I recommend Coinbase or Binance?

Coinbase or Binance are casinos. They will make you trade a lot of shitcoin with leverage and that’s not what 99% of people should do. Also, Coinbase crashes often and offers absolutely no privacy, let’s say it’s like the Facebook of cryptos. Personally, I touch it as little as possible.

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My opinion on DeFi! Is decentralized finance the future?

This is so cool. It’s going to change the world. On the other hand, the current state of the ecosystem is too complex, too volatile, too duplicitous, not secure enough, with fees too expensive on non-decentralized platforms for me to be fully interested. You risk losing everything.

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How long have I been in the industry?

Late 2017. I fomo’d, traded, made fortunes and lost it all again. I learned, I fell into it and I’ve been working in this industry ever since. I’ve been looking for the bottom of the rabbit hole for thousands of hours now, without success. Maybe I’m looking for something that will prove me wrong.

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Thanks to everyone who asked a question over the yeras. If you have one too, please reach me at rogzy@decouvrebitcoin.com I will try to answer you the best i can 🙂 

For way more data and ressources, keep exploring this website or follow Bitcoin Q&A website

Rogzy