Where Does Bitcoin Fit?
Okay, now you know what cryptocurrency is (a new form of digital value or money) and how it’s seen as the next evolution of “money”, but what exactly is Bitcoin?
Bitcoin is an example or TYPE of cryptocurrency, just like how the US dollar is a type of currency.
1 BTC = 100 Million Sats
A Quick History
Bitcoin is one of the first and most well-known cryptocurrencies. Bitcoin is a digital currency created in 2009 by a person or group using the pseudonym Satoshi Nakamoto. Born out of the 2008/09 financial crisis, at a time when global markets collapsed due to irresponsible financial management.
Why Bitcoin?
Scarce
There will only ever be 21 million bitcoin to ever exist.
Transparent
You can verify where your bitcoin came from and where it goes
Decentralised
Its core code and information are stored on multiple servers worldwide
Borderless
Bitcoin can be sent worldwide in no time
Freedom
Bitcoin cannot be controlled by any government, bank or company
Fungible
Bitcoin is perfectly interchangeable
A certain number of Bitcoin can be created—only 21M.
It is decentralised, meaning any government or financial institution does not control it. Instead, it relies on a network of computers around the world to process and verify transactions. Bitcoin is a reward for those who run computers to verify the network and ensure no one spends Bitcoin they don’t have.
In the early years, bitcoin was mostly used by tech-savvy individuals and was not widely accepted. However, its popularity and acceptance have grown over time, and it is now considered a legitimate form of currency by many.
Users can buy and sell bitcoins using online exchanges and use them to purchase goods and services from merchants who accept the currency.
Outside of payments, Bitcoin is seen as a store of value, as it’s tough to change and can be stored by people to protect their purchasing power.
We can also think of government as “non-state money”—meaning no central bank can change it.
In summary, Bitcoin works…
A focus on Bitcoin
Cryptocurrency remains significantly risky. However, the risks increase as you start to trade, buy and use other cryptocurrencies or items in the crypto ecosystem.
These cryptocurrencies are less tried and battle-tested. So far, Bitcoin has stood the test of time, remaining the only stagnant force in crypto since its inception in 2009. Some will say Bitcoin started off the cryptocurrency revolution.
For these reasons, we’ll be focusing on Bitcoin as the first cryptocurrency to buy. It’s often seen as the core pillar of any digital asset portfolio.
Bitcoin in 5 quick points
To rehash, Bitcoin is
- A type of cryptocurrency
- It’s one of the oldest and most battle-tested cryptocurrencies
- Decentralised—no one party can issue more bitcoins or change it without serious negotiation and agreement.
- The biggest cryptocurrency
- It is used not only as payment but as a store of value