What is Bitcoin?
Key properties of bitcoin
- Limited Supply – There will only ever be 21,000,000 bitcoins created and they are issued in a predictable fashion, you can view the inflation schedule here. Once they are all issued Bitcoin will be truly deflationary. The halving countdown can be found here.
- Open source – Bitcoin code is fully auditable. You can read the source code yourself here.
- Accountable – The public ledger is transparent, all transactions are seen by everyone.
- Decentralized – Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can’t be shut down similar to how Bittorrent works.
- Censorship resistant – No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint.
- Push system – There are no chargebacks in bitcoin because only the person who owns the address where the bitcoins reside has the authority to move them.
- Low fee scaling – On chain transaction fees depend on network demand and how much priority you wish to assign to the transaction. Most wallets calculate on chain fees automatically but you can view current fees here. On chain fees have risen recently due to network demand however instant micropayments are on the way via the Lightning Network, a second layer scaling solution currently rolling out on the Bitcoin mainnet 🙂
- Borderless – No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
- Trustless – Bitcoin solved the Byzantine’s Generals Problem which means nobody needs to trust anybody for it to work.
- Pseudonymous – No need to expose personal information when purchasing with cash or transacting.
- Secure – Encrypted cryptographically and can’t be brute forced or confiscated with proper key management such as hardware wallets.
- Programmable – Individual units of bitcoin can be programmed to transfer based on certain criteria being met
- Nearly instant – From a few seconds to a few minutes depending on need for confirmations. After a few confirmations transactions are irreversible.
- Peer-to-peer – No intermediaries with a cut, no need for trusted third parties.
- Portable – Bitcoins are digital so they are easier to move than cash or gold. They can even be transported by simply remembering a string of words for wallet recovery.
- Scalable – Each bitcoin is divisible down to 8 decimals allowing it to grow in value while still accommodating micro-transactions.
- Designed Money – Bitcoin was created to fit all the fundamental properties of money better than gold or fiat
Some excellent writing on Bitcoin’s value proposition and future can be found at the Satoshi Nakamoto Institute. Bitcoin statistics can be found here, here and here. Developer resources can be found here and here. Peer-reviewed research papers can be found here. The number of times Bitcoin was declared dead by the media can be found here. Scaling resources here, and of course Satoshi Nakamoto’s whitepaper that started it all! 🙂