Back to Basics | What is Bitcoin?
More Than Just a Currency
Often hailed as the “pioneer of crypto”, Bitcoin–if anything–is more like a multifaceted digital amalgamation of world-changing tech than some kind of cryptic technological fluke. Bitcoin is simply the inevitable product of years of work by other people who came before its pseudonymous creator known only as Satoshi Nakamoto assembled them. It is a decentralized immutable ledger–its nodes voluntarily run the same open-source code, and as such–it is also a software protocol. Bitcoin also serves various additional roles as the most robust payment network in the world, wherein its product (“BTC”--the currency) is an unconfiscatable digital asset. Finally, it’s also the best-performing store-of-value asset of the 21st century, and quite possibly, the most effective ‘savings’ technology the world has ever known.
But what do these mean? What is it? Really? We’re so glad you asked! Let’s dive in.
Bitcoin as Digital Gold
In the realm of finance, gold has always held a special place as a reliable store of value, immune to inflation, and a safe haven in turbulent times. (In fact, over the past century, most government currencies like the USD have famously lost 95% of their value against Gold.) Bitcoin, often referred to as "digital gold," mirrors these characteristics in the digital domain. Just as gold is mined from the earth using physical practices, so is Bitcoin minted from the digital world through a physical process known as mining. Like gold, Bitcoin is scarce, unlike gold, Bitcoin has a maximum supply capped at 21 million coins, ensuring its scarcity and deflationary properties. Investors often turn to Bitcoin as a hedge against economic uncertainty or monetary debasement, similar to how they have traditionally turned to physical gold. This is how Bitcoin earned its reputation over its short 15-year life as a modern-day digital store of value.
Bitcoin as a Worldwide Secular Network
Beyond its role as a store of value, Bitcoin is a global network that transcends borders, ideologies and private or central banks. It operates without centralized control, making it a powerful symbol of financial empowerment and inclusivity. The Bitcoin network is a decentralized ledger: “the blockchain” where transactions are transparent and unchangeable. The network enables peer-to-peer transactions and fosters trust in a trustless world. In regions with unstable financial systems or oppressive governments, Bitcoin offers a lifeline for economic autonomy and capital preservation. Its global, secular nature makes it a beacon of hope for those seeking financial independence, or freedom from seizure and/or persecution.
Bitcoin as a Payment Technology
Bitcoin's use as a payment technology cannot be understated, and if the advent of Government CBDCs (Central Bank Digital Currencies) are any indication; it has already revolutionized the way we transact. Bitcoin allows for fast, borderless, low-cost international payments, making it a formidable competitor to traditional financial systems and remittance services. Additionally, Bitcoin enables micropayments (using its smaller denominator called Satoshis–1 BTC equals 100M ‘sats’, as they’re called–opening new possibilities for monetizing digital content and expanding borderless e-commerce opportunities. The lightning network, built on top of Bitcoin, enhances its transaction speed and scalability, further solidifying its advent as a superior payment technology.
Bitcoin as Store of Value/Savings Technology
The store of value aspect of Bitcoin extends beyond mere preservation of purchasing power; it promotes a culture of savings and responsible financial management. Bitcoin's scarcity, coupled with its historical price appreciation, incentivizes long-term holding. Savers can protect their wealth from the erosive effects of inflation. Bitcoin also encourages a "not your keys, not your coins" philosophy, promoting self-custody of funds through wallets, and self-sovereignty through financial literacy. This puts the control and responsibility squarely in the hands of its users. Bitcoin empowers individuals to save for the long term, free from the risks associated with centralized institutions, such as despotic government seizure or bank failure. As a savings technology, Bitcoin cultivates financial responsibility and independence.
In summary, Bitcoin is not merely a cryptocurrency; it's a multifunctional financial tool with a bright future. It serves as ‘digital gold’, an incorruptible worldwide secular network, a payment technology, and a store of value and savings technology. Its already begun to profoundly reshape the financial landscape, offering global individuals a path to financial autonomy, empowerment, and security–regardless of whether they have access to local bank branches. Whether you're seeking a hedge against economic instability, borderless payment options, or a secure means of storing and growing your wealth, Bitcoin is the most dynamic and promising force in the world of finance and technology today.
Don't forget to follow us on social media for more updates and join the conversation on our forums.
Disclaimer: This article is not intended to provide investment, legal, accounting, tax or any other advice and should not be relied on in that or any other regard. The information contained herein is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of cryptocurrencies or otherwise.