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```md
# The five principles of Bitcoin
What to do and what not to do
```

# The five principles of Bitcoin.

What to do and what not to do.

(pause: 1)

I collected five principles for everyone using Bitcoin, for beginners as well as experts. You may recognise them as memes you've heard before. I chose memes as they are easy to remember. There are more principles that are helpful, however these five are the most important ones.

---


```md
## 1. Bitcoin, not crypto

Bitcoin is a hard asset, "crypto" isn't.
```

(pause: 2)

## 1. Bitcoin, not crypto.

The vision of Bitcoin is to be the best money there can be. This is achieved
through focus on decentralisation. Without decentralization, someone could
change the rules, make more Bitcoins out of nothing, redistribute other
people's Bitcoins. All the other "cryptos" have a centralized team of people
who determine the rules. There have been attempts in the past to change the
rules of Bitcoin, and they failed. Changes in Bitcoin take many years to
succeed and are more like optimizations than rule changes.

After Bitcoin came out, there was an altcoin bubble, after that DAOs, and now
NFTs. Many of these are just scams. Some may have interesting technological
properties or have a narrow specialised uses. If you want to spend money on
them, you're just gambling.

---

```md
## 2. Not your keys, not your coins

Keep your keys yourself, private and secure
```

(pause: 2)

## 2. Not your keys, not your coins.

The Bitcoin balances are controlled by cryptographic signatures. This is what
Bitcoin, is, a collection of crypographic signatures (and some other
things). In order to transfer Bitcoin, you need to perform this cryptographic
signature and for that you need to have piece of data called "private key". In
other words, having the private key, means, having Bitcoin. If you use a
custodial service (third party) for handling your Bitcoin, like a bank or an
exchange, it's, they, that have Bitcoins, not you. You're introducing the
trust in this third party into your relationship with Bitcoin. You're
re-introducing one of the main problems that Bitcoin is solving. For a wide
number of reasons, the custodian can refuse to do what you tell them. In fact,
many don't even allow you to withdraw or send Bitcoins on your behalf. They may
even lose them, as has often happened in the past.

With Bitcoin, you can self-custody. This requires some learning and some
practice, but you can't get the full benefits without self-custody. You need to keep
your private key private. Anyone who sees it can take your Bitcoins. If you
show it to somebody, they are gone. The private key needs to be protected
against thieves, but also against damage. If the private key is damaged and
it's the only copy, the Bitcoins are gone. Many people have suffered
losses by not taking proper care of their private keys, and probably many still
will.

There is a variety of solutions that help, I'll demonstrate a couple in later
videos.

---

```md
## 3. Stacking sats

Buy Bitcoin over long time in small chunks
```

(pause: 2)

## 3. Stacking sats.

An easy way to get accustomed with Bitcoin is to accumulate Bitcoin
periodically for the long run, commonly known as "Dollar Cost Averaging". Pick
an amount that you feel comfortable with putting aside, such as hundred dollars
a month. Then, every month, preferably on the same day, buy 100 dollars' worth
of Bitcoin, or Satoshis (sats). Satoshi is the base unit of Bitcoin, there are
one hundred million Satoshis in one Bitcoin. Most commonlly people DCA every
month or every week, but some do more frequently.

The advantages of this approach are that it's repetitive, so you'll learn it by
practice. It's simple, so you don't need to perform a lot of mental work. It
doesn't depend on the market conditions, so you don't need to worry about
understanding them. It doesn't depend on having trading experience, so you
won't be influenced by psychology. It is working in small steps, so if you make
a mistake (and this can happen for beginners), your losses will be small.

Don't daytrade, you don't understand how trading works, you'll lose money.

---

```md
## 4. HODL

Keep your Bitcoins and don't sell them in panic or to speculate
```

(pause: 2)

## 4. HODL.

Selling your Bitcoins has a broad range of 

- selling has a number of disadvantages, so you should avoid it
- during downturn, you may lose money
- selling may incur taxes
- selling may create problems with banks

https://www.calcalistech.com/ctech/articles/0,7340,L-3923405,00.html - Esther
Freeman has no coins.

- what to do instead?
- do nothing
- sell a small amount, whatever you urgently need
- if you need to pay for something or send a gift, maybe sending Bitcoin
  directly without sell would work
- try to get a loan using Bitcoin as a collateral

---

```md
## 5. Don't trust, verify

Don't rely on other people's computers
```

(pause: 2)

## 5. Don't trust, verify.

- even if you have a private key, that alone doesn't tell you how many Bitcoins
  you have. For this you need to connect to a node and query it. But the node
could lie to you and trick you.
- you can run your own node, then you can verify the balances yourself
- this is a bit more complicated and takes more effort than the other steps,
  and isn't as big a danger, so perhaps it isn't necessary that every person
runs their own node, but maybe there can be one in a family or something like that

---

```md
# Summary
1. Bitcoin, not crypto.
2. Not your keys, not your coins.
3. Stacking sats.
4. HODL.
5. Don't trust, verify.
```

(pause: 2)

Summary.

1. Bitcoin, not crypto.
2. Not your keys, not your coins.
3. Stacking sats.
4. HODL.
5. Don't trust, verify.

(pause: 2)
