Bitcoin is truly yours

Cash is not the same as a cheque.

If I give you a €100 note, I can’t then change my mind and cancel your cash. Once you have the physical bill, you (and only you) can spend it.

By contrast, if I give you a cheque for €100 but then instruct my bank to cancel it, the cheque becomes worthless.

Possession confers the value of the cash to you, placing it beyond my control. The same is true of a few other financial assets, such as gold: if you have an ounce of gold, neither I nor anyone else can cancel its value. Gold is gold. I can’t call up my bank and have them change your gold’s chemical properties.

A cheque, on the other hand, can be stopped. This is similar to almost all financial assets: shares, property, government bonds, stablecoins, bank accounts, and so on. Unlike cash or gold which are controlled by whoever holds them, these other things are controlled by ‘trusted’ third parties: the company that issued the shares, the bureaucracy which registered ownership of the property, the government which issued the bond, the issuer of the stablecoin, the bank which holds the account – they can all simply freeze, cancel or otherwise censor the asset. Sometimes, they do so. Such assets are not resistant to censorship.

Some – but very few – financial assets, such as cash and gold, are resistant to censorship. This is partly because possession confers direct control, and partly because they are fungible: your €100 note and your ounce of gold are as good as – and practically indistinguishable from – anyone else’s.

To determine whether Bitcoin is censorship resistant, we can look at its history. Throughout its unbroken uptime over the past decade, no transaction confirmed by the network has ever been cancelled. Confirmed Bitcoin transactions are immutable – once they have been made, they are permanent, and exist indefinitely in the Bitcoin ledger. This is only possible due to Bitcoin’s robust security and its truly autonomous, self governing nature.

But censorship is not the only way trusted third parties can cause you to lose your assets. Companies fold. Governments default on their loans. Stablecoin issuers fail. Banks go bust. These are examples of counterparty risk.

But with Bitcoin, there is no counterparty risk. Like a physical bar of gold, your Bitcoin isn’t anyone else’s liability and it isn’t controlled by anyone else.

Unlike almost all financial assets, Bitcoin is censorship resistant and has no counterparty risk.

Bitcoin is truly yours.