So What is Bitcoin?
Bitcoin is the world’s 1st digitally native currency and payment network which is based on the blockchain technology. This new asset has a limited supply and can be sent anywhere in the world with no governments, central banks, corporations, or bureaucrats having control over the network. Anyone with an internet connection can download the appropriate software on their device and start using Bitcoin.
In simple terms Bitcoin is a software, no different than Facebook, Google, Amazon etc.
Bitcoin is monetary software that follows a set of rules which users, when interacting with this software, can take advantage of. In the case of Bitcoin, the rules are simple:
- New bitcoin can only be mined by miners who help secure the network and process transactions with their computing hash power.
- Bitcoin has a pre-programmed inflation rate that eventually hits 0% once the 21 millionth bitcoin has been mined in approximately by 2140.
- Transactions are processed approximately every 10 minutes.
- Confirmed transactions are irreversible.
Why is Bitcoin valuable?
Money is useful because it stores value over time and can be exchanged for various goods and services. Bitcoin is no different than any other money in this respect. However, bitcoin is uniquely valuable compared to monies of the past as it lacks counterparty risk, is natively digital, is globally accessible, and has a hard cap on its supply. Bitcoin can be sent anywhere in the world at any time over the internet and users have high assurances that their holdings will not be diluted by any unexpected inflation, all without a trusted central party like a bank or government in the middle. No other currencies on earth, up until the creation of bitcoin, have had these characteristics.
People can choose to hold their personal assets in many different forms, whether that is in U.S. dollars, stocks,bonds, etc. However, by holding any of these assets, and many others not mentioned here, there is inherent counterparty risk, meaning holders of these assets must trust centralized organizations to maintain the value of these assets and remain honest in their operations. In contrast to trusting an organization, Bitcoin relies on a distributed network of computers, mathematics, and incentives for its successful operation.
If you hold one bitcoin, you hold one out of 21 million bitcoin that will ever exist. How you decide to secure your bitcoin determines your reliance on outside parties. You can hold your bitcoin in a vault on your smartphone, in a vault on your computer, in a vault on a special hardware device, in a vault with a bank, and believe it or not, you can even hold bitcoin in your head.
Bitcoin Simplified –
Bitcoin is an asset that is absolutely limited in supply with no third party having the means to tamper with this feature. Bitcoin can be sent anywhere in the world to anyone with an internet connection, unobstructed by borders or would-be censors. Bitcoin can be stored in countless ways, each of which has its own security implications, but if a user so desires, they have zero need to rely on a financial institution, a bank, or a custodian of any kind for securing, holding, and/or managing their assets. These features are what drives incredible demand for bitcoin and gives bitcoin a strong foundation for an even brighter future.
To learn more about cryptocurrencies and blockchain, check out the Cryptocosm on some of the major podcast platforms like Apple Podcasts, Spotify etc.
Listen on Apple Podcast – Click The Link https://podcasts.apple.com/us/podcast/cryptocosm/id1579315882