Written By 1Bitcoin.ca, November 15th, 2021
As we mentioned in Introduction to Bitcoin, Bitcoin is the next step in the evolution of the internet - It is the money layer of the internet. It allows a user to transfer value to someone else without the need of a third party. Imagine being able to ‘e-mail’ someone $10 and that $10 is accepted by every country around the world, 24/7, 365 days a year. It truly is the money of the internet.
Since the dawn of the internet age, transacting and communicating with someone in the digital realm has always needed a trusted third party to facilitate the transaction. If you e-transfer a friend $10, your bank does it for you and the recipient has an entity to receive the money on their behalf. This involves 4 parties to conduct a simple transfer. When you add this up, this friction adds time and cost.
Bitcoin completely removes the need for a trusted third party. Bitcoin allows you to communicate directly with who you want on an open platform and removes all unnecessary intermediaries. Western Union and other monetary intermediaries are the Blockbusters of finance, Bitcoin is the Netflix that is about to disrupt their entire business model. It is an engineered global monetary network that allows you to send value peer to peer across the globe.
What Characteristics Make Bitcoin Special?
Open Source. All the code you need to run is open source and reviewed by millions of people. You can review the code before you run it. Every computer and user on the Bitcoin network abides by the rules in the code.
Voluntary. You don't need to participate if you don't want to. Voluntary systems typically work better than forced systems.
Decentralized and distributed. Copies of the ledger exist all over the word. There is no centralized entity to shutdown or attack.
(image source: www.trustnodes.com)
Network with a flat hierarchy. This means there is no admin function. Everyone has the same rights. To send, receive, and verify transactions.
Verifiable. Everyone around the world can access the Bitcoin network and verify numbers to make sure that down to a satoshi there are no cheaters on the entire network. This also means you can verify your ownership percentage of a monetary network!
Bitcoin is for everything and everyone. True digital implementation of pure math. However, if you want to jump into the Bitcoin sandbox, you must operate by the same consensus that everyone else is abiding by. There are no rulers of Bitcoin, but there are predetermined rules:
There will only ever be 21,000,000 Bitcoin. The first provable scarce digital asset is baked directly into the protocol. The foundational aspect of Bitcoin is that no third party can alter, inflate of dilute their holdings.
The supply schedule/halvings. Bitcoin was initially mined at a rate of 7200 BTC per day for the first four years of its existence. After which we had a halving that reduced that rate to 3600. Every four years it will continue to half until the year 2140. The scarcity of new Bitcoin doubles every 4 years!
Self regulation. Every 10 minutes, a new block gets added to the blockchain. This allows Bitcoin to self regulate itself to ensure the network responds to increases and decreases in mining hash rate, as well as balances out the ledger permanently.
Bitcoin is an engineering marvel. In only 12 years, Bitcoin has already begun to revolutionize how we interact with money. This is a better technology and is being adopted at an exponential rate because of it. It is currently worth $1.400.000.000 (Trillion) which is 3 times bigger than the big 5 Canadian banks combined!
Bitcoin is to money and value as the internet was to entertainment and media, as the printing press was to books and newspapers.
Bitcoin is here to stay.
If you would like to learn more about Bitcoin, 1Bitcoin.ca offers individual and group session. Contact us today to book a session with our Bitcoin Brokers.