Bitcoin is two things - A database (or blockchain) and the first cryptocurrency to solve the double-spend problem. Additionally, Bitcoin is completely decentralized, and it enables peers to send irreversible trustless secure transactions over the Internet.
It aligns incentives of miners and the users, so the irreversibility of the transactions is upheld.
On top of that, Bitcoin may be the most secured database in the world.
BTC is also divisible into smaller parts, called Satoshis. One Satoshi equals 0.00000001 of a Bitcoin.
It’s interesting to note that the idea of "cryptocurrency" was first talked about on a mailing list in 1998. In 2009, Bitcoin’s primary specs were published in a cryptography mailing list by an anonymous entity with the name Satoshi Nakamoto. Satoshi (the namesake of the smaller parts of a Bitcoin) left the project in late 2010. Now, many developers work on Bitcoin’s open-source software and protocol.
Users use mobile apps or computer programs with wallets to send and receive BTC.
The Bitcoin network or blockchain shares a public ledger that keeps every processed transaction. Digital signatures let users send Bitcoin from their own wallet addresses. Bitcoin transactions are processed by specialized hardware. Doing so is called “mining” – more on that later.
Nakamoto, Bitcoin’s creator, saw the need for “an electronic payment system based on cryptographic proof instead of trust.” Because Bitcoin is a decentralized digital currency, you can buy, sell, and exchange it directly, without an intermediary like a bank.
New bitcoins are minted, or created, by a competitive and decentralized Proof of Work (PoW) process called "mining". Only the right miner to get the right answer (or closest one) to a numeric hash problem creates new blocks on the blockchain and, as a result, earns new BTC. Bitcoin miners use expensive, specialized hardware with a lot of computing power for figuring out the problems, as well as processing transactions and securing the network to prevent double spending.
Based on the Bitcoin protocol, each new coin is created at a fixed rate, making mining very competitive. As more miners join, it’s harder to make a profit and they must look for ways to efficiently manage their operating costs. No one miner has the power to control or fix the system to boost profit.
Because Bitcoin has a set supply, the number of new coins mined is automatically halved every four years. That will continue until the supply hits 21 million coins in existence, which is estimated to be in about 2140. Then, it’s thought that miners will collect their earnings from transaction fees.
When mined, the new BTC is put into circulation by a reward portion given to miners.
It does not get burned.
The BTC transaction fee goes to the miner who mined the block the transaction is included in.
Bitcoin is deflationary because it has a fixed supply and the mining reward, as explained above, is halved every four years.
Additionally, there are many people who misplace their hard drives with stored BTC. People who forget their keys to access their BTC or people who send BTC to ghost wallets.
You own the ability to transact on the Bitcoin blockchain.
Bitcoin does not have a roadmap. Developers can work on Bugs, write code, and review other people’s code for the Bitcoin blockchain.
On top of that, there are many different projects being built on top of the Bitcoin blockchain. One of the more spoken about projects is the Lightening Network. It is attempting to enable lightning-fast bitcoin transitions with next to no fees on the Bitcoin blockchain.
This is when more than 50% of the miners who control more than 50% of the networks hash rate. If successful, the rogue miners could block or reverse transactions and spend the same BTC again.
As of July 2022, would be 51% attacks would need 101 EH/s of hashing power. To execute, attackers would need 396,000 ASIC miners at a cost of over US$8 billion.
Bitcoin’s PoW mining process requires expensive, energy-intensive computers, making it seem unfriendly towards the environment.
A misunderstood reality is inexpensive energy is needed to ensure profitable mining. Miners situate themselves as close to inexpensive energy as possible. On top of that, they would be consuming excess energy entering the grid at any given time.
Some consider mining storing excess energy vs. wasting it.
In China, mining or holding cryptocurrency is illegal. And India has put a 30% tax on crypto transactions.
In many other countries, institutions are searching for clarity around cryptocurrency regulation.
Like traditional markets, Bitcoin is subject to pump and dumps, wash trading, spoofing, stop hunting, and spreading false rumours.
Distinct to crypto, “whales” create buy and sell walls to influence the perception of the market.
Currently, Bitcoin processes 3 transactions per second (TPS). And one block takes 10 minutes to process. Visa processes 65,000 TPS.
In order for Bitcoin to become a viable payment solution it will need to faster and less expensive than credit card transactions.
Also, Bitcoin and other cryptocurrencies continue to be volatile, detracting some investors.
Any of these risks could affect BTC’s price.
BTC ticker: $BTC
Max Supply: 21,000,000
Total Supply: 19,144,718
Circulating Supply: 19,144,718
Market Cap: CA$484,830,536,437
Fully Diluted Market Cap: CA$531,788,411,623
TPS (Transactions per second): 3 (average)
Developer Activity: High
TVL (Total Value Locked): US$103.42 million
Total Staked: Not applicable
*as of September 8th, 2022 at 10:00AM ET
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