In the crypto world B.Y.O.B. does not stand for “Bring Your Own Beer”, but for “Be Your Own Bank”. With this in mind, B.Y.O.B. represents the original mantra behind Bitcoin – Satoshi Nakamoto’s vision of maintaining independence from state-run currencies. But freedom does not come without price.
With great power comes great responsibility.
… is the last sentence Peter Parker, aka Spiderman, hears from his uncle Ben. This sentence is often used in various contexts – also in the universe of Bitcoin & Co.
Be your own bank
The 2008/2009 financial crisis has left the banking system in a deep rift. Lehman Brother’s bankruptcy was the greatest in the history of the world. In 2008, the US government approved a “rescue package” of 700 billion US dollars. In addition, the US Federal Reserve Bank launched what is known as the “quantitative easing” and printed around USD 3.5 trillion as a result. This money ultimately comes out of taxpayers’ pockets. The population has no choice – the legal tender must be used (for example when paying the tax burden). The people are thus hostage to an economic experiment of epic proportions.
Bitcoin is on the right track. Thanks to Satoshi Nakamoto, there is now an alternative means of payment that people can use if they wish. Bitcoin offers each of us an opportunity: You can be responsible for your own money – your own bank. What’s the catch?
Don’t pay for other people’s mistakes
Given the experimental monetary policy of central banks, the advantage of Bitcoin is obvious. The amount of money in Bitcoin is determined by the source code and cannot be changed arbitrarily. In Bitcoin, a state cannot decide to print several trillions. The confiscation of the population’s funds is also impossible. In this respect Bitcoin is a safe haven: the rules are clear, no central authority can change them. Therefore Bitcoin is independent of state monetary systems.
Bitcoin users are also independent of trustees. Apart from a missing publisher, users can also manage their money themselves. In short: B.Y.O.B. This is how you protect yourself from eventualities like the Lehman Brothers bankruptcy. Not to forget that many pensioners lost their old-age provision at that time.
So, holding your own money erases the counterparty risk. This means the risk of losing money due to mismanagement by another party (e.g. the bank). Moreover, Bitcoin is independent of a central currency publisher. Bitcoins are distributed automatically and impartially by the rules of computer code.
The purchase of Bitcoin alone does not offer independence. If the digital coins remain on a centralized exchange, nothing is gained. Only those who have exclusive control of the private keys have financial freedom.
“Forgot password?” is not an option in the Wild Crypto-West
Such power! be your own bank. The “disadvantage” is that you are in charge. Anyone who loses their private key, sends a transaction to the wrong address or takes poor security measures is on their own. There are no people in charge to ask for help. This requires that you are sufficiently familiar with the technology, that you can assess the risk and that you hedge yourself accordingly with back-ups.
So you are responsible for yourself. A disadvantage for all those who do not know where the top and bottom are – an advantage for all those who are up to the responsibility.
One final point
The first contact with crypto currencies makes you feel overwhelmed – so much information, so many different opinions. You want to throw your hands in the air: “You do that for me. However, it is premature to react in this way to innovation. Crypto is new territory, yes. That’s why exploration is all the more important – instead of burying one’s head in the sand.
Once you’ve taken your first steps, you’ll find that everything isn’t that complicated. Help from like-minded people is available online – Reddit, bitcointalk, Facebook groups.
Finally, let us not sacrifice freedom for supposed security. Crypto currencies are an alternative to the state system. Let’s learn together to master the technology and use it responsibly.