Bitcoin is a technological breakthrough rising as a new global monetary system. This article will offer you some guidelines to understand why it matters.
Bitcoin is open source, permissionless, peer to peer programmable money. The supply is hard capped at 21 million coins, which cannot be changed. The network is peer-to-peer and transactions take place between users directly, without an intermediary such as a central bank. These transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a
Each block is linked to the previous block thus creating a chain of blocks that cryptographically establishes a public record of valid transactions that can’t be altered without altering its block and the ones after it.. Public personalities, influential investors and entrepreneurs would not have gone as far as endorsing it if they did not believe Bitcoin was here to stay., Ray Dalio, and several other VIPs have added Bitcoin to their companies’ reserve assets, often replacing gold and cash reserves, besides owning the asset in their personal portfolios.Price volatility is often seen as a significant issue to potential investors, but many will argue that’s actually a feature, not a bug.
This process is called proof of work, and it’s the essential consensus algorithm that constitutes the backbone of the network and provides it with the highest security. Bitcoin can be easily verified and audited due to its primarily immutable and programmable protocol, compared to physical assets like gold which are much harder to scrutinize. They are both decentralized forms of money that can be held independently from any intermediate.
If we add scarcity and other properties like censorship-resistance, programmability and decentralization, bitcoin is close to the most perfect type of money ever created, as highlighted below. Despite the enormous growth bitcoin has recorded over the years and its price reaching an all-time high of nearly $68,000 in November 2021, bitcoin’s potential to grow further is very strong — often referred to as Number Go Up technology, strictly liaised with the halving event that cuts block production in half, making it more scarce and, therefore, more valuable each time.
Considering that fiat currencies continue to lose purchasing power and bitcoin, in contrast, continues to show resilience to market conditions increasing in value over the years, investors can quickly draw their conclusions. The extreme speculation that occurs in crypto markets has led small investors to buy the cheapest of coins because they believe they will go up in value regardless of their real use case and fundamentals. This leads them to make much riskier investments and buy and HODL altcoins.
More recently, banks have considered offering bitcoin. Especially in the U.S., a few major financial institutions are apparently ready to allow their customers to buy, hold or. The increasing interest of customers around Bitcoin encourages them to follow this path, knowing that otherwise, they would look elsewhere to invest in bitcoin.
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