Among all of the cryptocurrencies that are out there, and there are many, Bitcoin is the biggest and most widely known among them. Even though compared to its crypto counterparts, it has been around for more than a decade now, it's still a remarkably young digital asset compared to fiat currency and precious metals.
But compared to the latter two, Bitcoin has all of the potential to do what they cannot - innovate, disrupt and take on a value beyond these more centralised entities. This potential aside, the story behind Bitcoin is a pretty interesting one in itself. So we'll be taking the time to really delve into its history and answer the question - What is Bitcoin?
Bitcoin is the most widely known cryptocurrency, meaning that it's an asset that only exists digitally. While it was initially brought forward as a system of currency, it along with other digital assets have become both a method of investment, but also as a store of value.
According to research conducted in 2018, more than half of Americans that hold Bitcoin liken it in function to precious metals. As in a kind of hedge against market volatility and digital store of value.
It's because of this that people have begun to hold BTC as part of their investment portfolio. Thanks to this attention, Bitcoin has managed to muster up a market cap of over $175 billion this year with its closed closet contender within the crypto ecosystem being Ethereum. The Ethereum Vs Bitcoin competition has been massive but Ethereum has never managed to really contend.
The idea of purely digital currency wasn't brand new, however. A number of thinkers at the time, including people that are popular in the crypto world now, were all advocating for something like this (Roger Ver, Craig Wright, etc).
But the one that really made waves was Satoshi Nakamoto with the titular 'Bitcoin: A Peer-to-Peer Electronic Cash System' which was published in 2008. In this white paper, the author[s] walked through just how Bitcoin could function as a trust-less, peer to peer digital currency solution, with the longer-term goal of being an entirely practical, and international currency.
It was somewhat appropriate that during the time: centralized banks were undergoing the single worst economic recession since the Great Depression, wiping trillions of dollars off the market, with a ripple effect that is still being felt.
Bitcoin, as previously mentioned, operates in a wholly digitalised and trust-less way. This means that holders will be able to pay other users through their digital wallets with relative ease.
All a user would need to do is get the unique wallet address from the person they wish to send the BTC to, specify the amount and send!
While the immediate advantage is the fact that it's an entirely trust-less, international, secure and anonymous[ish] payment system. The drawback is that the transaction speeds still leave something to be desired.
While multinational organizations like PayPal, Visa and Mastercard can complete more than 1,700 transactions per second, Bitcoin is limited to 4.6 per second. And while Bitcoin's core development team have been working to resolve this with methods of compressing information and speeding up transactions (layer-2 solutions). Bitcoin sacrifices speed for a wholly globalized system of payment.
We'll be digging into far more detail about Bitcoin in the near future as well. In the meantime, give us your thoughts on Bitcoin and what the future has in store for it!