The revolutionary digital asset

Bitcoin is a revolutionary peer-to-peer digital asset immune to duplication and manipulation.

It’s been making headlines recently with its rapid rise in value. It was worth nothing when it was launched anonymously in 2009 as an open-sourced project. Today the price of one bitcoin is above $8000 USD and the total market cap sits above $140 billion.

Bitcoin’s decentralized nature is what makes it so revolutionary and attractive.

Traditionally, the storage and transfer of value requires trust in multiple third parties. Governments and central banks control the money supply and interest rates, while commercial banks and credit unions keep records of balances and transactions.

Bitcoin eliminates the middle man.

At the end of the day, a dollar is just a unit of value recorded in centralized databases administered by our banking system. It’s susceptible to high fees dictated by financial monopolies and at risk of loss, seizure, control, and devaluation through corruption of centralized weak points.

Bitcoin eliminates the middleman and empowers each individual to control and secure his or her own wealth. It’s a unit of value recorded on an open ledger administered by everyone and controlled by no one.

Blockchains and block rewards.

Hundreds-of-thousands of individuals across the globe, known as miners, contribute computing power and data storage to facilitate transactions and secure the network. They record a permanent record of transactions onto a public ledger that’s duplicated across the network. The ledger is made up of a sequence of blocks of data, known as a block chain.

Miners are incentivized to confirm the facts of each block through an open-sourced cryptographic consensus algorithm. The miners whose results fall within the consensus are rewarded with a share of newly minted Bitcoin and the proceeds from transaction fees processed in that block.

The block reward serves as a strong incentive to report the truth to fall within consensus with the rest of the network. And the electricity and hardware costs required to bring 51% of the network into consensus with a lie makes fraudulent transactions prohibitively expensive. The laws of human nature act as a natural defence system, which has yet to be penetrated since Bitcoin’s adoption.

Bitcoin’s supply is capped at 21 million. Its value is therefore determined entirely by demand. And based on the current price, it’s clear the market sees value in a decentralized record of assets immune to manipulation.

Bitcoin’s success has inspired an entire new market of competing cryptocurrencies. Some investors have found themselves millionaires overnight. Others have lost everything in the same amount of time.

Author’s note: I originally published this piece at cryptocove.ca