Bitcoin: From Mysterious Origins to Global Domination!

By now, you have likely heard the word Bitcoin or its market ticket BTC. However, you probably don’t know it works, and how you can benefit from it.

The creator of Bitcoin

Bitcoin was created by the mysterious Satoshi Nakamoto in 2009 and was seemingly in response to the 2008 financial crisis.

Satoshi’s vision for Bitcoin was that of a decentralized payment network, a digital currency for a digital future. Though, in recent years as Bitcoin has found itself more akin to digital gold than digital cash, but I’ll come back to that shortly.

First, let’s talk about how Bitcoin works.

Bitcoin was designed to be a decentralized peer-to-peer payment network with zero restrictions on entry. No matter where you’re from, you could join this network, and your BTC would be worth the exact same as any other BTC.

Bitcoin is decentralized, meaning there’s no centralized governing body administering the network. No single country or company can control or dictate the Bitcoin network as this network is hosted by its users located all over the world.

Bitcoin is also ran peer-to-peer, which means user to user, and despite the prevalence of crypto exchanges now, in the beginning the only way to buy Bitcoin was through a peer-to-peer marketplace.

Although Bitcoin was intended as a payment network for the digital age, as time progressed, Bitcoin found itself used less as digital cash and was utilized more like the digital gold for the digital economy.

While others have came along and out performed Bitcoin in some metrics, like providing cheaper and quicker transactions, none of them have had the successful longevity of Bitcoin.

Without legal protection and with significant monetary value at stake hacking the Bitcoin network has so far proven impossible.

Bitcoin is secure

As far as cryptocurrencies go, Bitcoin is the most provably secure network. Despite not being the quickest or the cheapest network, Bitcoin’s value comes in its security and years of uptime without incident or interruption.

Whenever the markets wobble, and the money leaves all coins that are not named Bitcoin, a portion of this money will often end up pouring back into BTC as a safer long term investment.

Investors realize the market often follows Bitcoin, so when looking for certainty in uncertain times, Bitcoin is often the chosen cryptocurrency for long term security.

How are Bitcoins created?

To get Bitcoin, you’ve got to be given it, buy it, or mine it.

Being given it, or buying it, is simple enough, but mining Bitcoin requires some explanation.
Unlike other cryptocurrencies I’ve talked about previously, Bitcoin runs a Proof-of-Work consensus mechanism to verify its transactions.

In short, mining Bitcoin refers to how new blocks of data containing a record of the new transactions is confirmed and added to the Bitcoin ledger, known as the blockchain.

What is Proof of Work?

Proof-of-Work is the oldest, most robust and thoroughly tested of all blockchain consensus mechanisms, and currently, the Bitcoin network creates 6.25 bitcoins every 10 minutes.

But, to receive this reward, you must use your computing power to solve a complex cryptographic puzzle.

Those who solve the computation first can easily prove they are correct, as solving the puzzle is like finding the opening combination for a bike lock.

Once you solve the puzzle and open the lock, others can use your answer to open the lock and prove your answer was correct.

The first to solve the puzzle unlock the Bitcoin reward. While Proof-of-Work is the most secure and tested type of network, they do have drawbacks.
For example, Proof-of-Work are some of the slowest and most energy intensive blockchains available.

This is because of the battle between decentralization, security, and speed, with only two being possible without compromising on the third.

In this case, Bitcoin sacrifices speed in order to remain decentralized and secure. However, the downside is it requires 51% of the network to agree on each transaction before confirming it, which consumes a lot more power than Proof-of-Stake or Proof-of-Authority consensus mechanisms we’ve talked about previously.

There will only ever be 21 million Bitcoin, with Bitcoin released upon the completion of verifying transactions.
Initially, this was 50 bitcoins released every 10 minutes. However, the amount released every 10 minutes is cut roughly every 4 years, and will continue to do so until all 21 million bitcoins have been mined.

Currently, 6.25 bitcoins are released every 10 minutes to whoever completes the complex cryptographic puzzle first, with the next “halving event” set to occur in the first half of 2024.

As such, its value comes from its utility, scarcity, and lack of interference or oversight from political entities.

What problems does Bitcoin solve?

If you could ask Satoshi, I’m sure the answer would likely include how decentralization and self-custody of your finances means funds cannot be tampered or taken away.

No more could governments interfere with the economy, nor could they employ risky business practices which led to the 2008 financial crash and the creation of Bitcoin itself.

However, if you’re trying to convince someone of the benefits of Bitcoin who doesn’t see as much importance in privacy, security, and self custody it could also be described as a new medium of exchange.

Without getting technical, Bitcoin is a fast, cheap, and globally available network for people to transfer funds.

For people who send currency abroad to support family members, Bitcoin offers an alternative to regular currency exchanges.

As an example, Western Union and MoneyGram are unable to trade in certain countries, which rely on billions in the form of international remittances yearly, due to sanctions.

Bitcoin offers a network that cannot be manipulated or stopped, is online 24/7, 365 days a year to everyone with an internet connection. No identification documents required, though all transactions are recorded and publicly viewable.

Lastly, unlike bank transfers which can take up to 3-5 working days to reach their destination, Bitcoin will arrive in 10 minutes and can be converted into the local currency within a few clicks.

In conclusion, n its most basic essence, Bitcoin is a new payment method – a digital currency for a digital economy, accessible to anyone with no limitations on entry.

Always online and accessible to everyone that can connect to its network. Bitcoin will reliably and cheaply transfer funds to and from within 10 minutes of clicking send.

Despite the complexity of the system behind Bitcoin, using Bitcoin in 2023 is as simple as using PayPal.

Free wallets like Metamask, Coinomi, or Exodus offer self-custody wallets that provide one-click services for buying, sending, and selling cryptocurrencies.