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Bitcoin (BTC)

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What is Bitcoin?

Invented in 2009 in response to the 2008 financial crisis by pseudonymous creator Satoshi Nakamoto, Bitcoin is a peer-to-peer electronic cash network. It was the first blockchain-based cryptocurrency and it solved a very important problem for electronic forms of money: digital scarcity. By establishing a 21 million coin hard cap, Bitcoin is a deflationary asset, meaning its supply can only dwindle over time. Many experts, including the investment titan Fidelity, agree that Bitcoin has all the key characteristics of sound money. 

 

What makes it unique?

  • An open-source, decentralized, distributed peer-to-peer digital cash network founded in 2009 by the ghostly Satoshi Nakamoto;

  • Supply is capped at 21 million coins;

  • Recognized as legal tender in El Salvador;

  • Miners consume energy to produce Bitcoin. Incentivizes miners to go where energy is cleanest and cheapest;

  • Each coin is divisible 100,000,000 times, the smallest unit is called a “sat”;

  • Antifragile: the more it endures and the longer it survives, the stronger and more resilient it becomes to attacks and vulnerabilities;

  • Has a near-perfect track record with 99.98% uptime, meaning network outages are very rare, with the latest one happening in 2013.

 

Finality

Bitcoin uses Proof-Of-Work consensus, which means it relies on miners dedicating their processing power to solve complicated math puzzles to secure the network and receive block rewards. The complexity of these problems grows over time. Bitcoin, being distributed, undergoes a halving cycle every 4 years where the reward given to miners for solving a block is cut in half. In a recent publication investment giant Fidelity explained why they believe Bitcoin contains all the properties of sound money: divisible, durable, fungible, portable, verifiable, and scarce.

 

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