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Satoshi’s Dream Child
Inflation is everywhere, and people will increasingly look for alternatives to government money.
It has taken me more than a decade to digest just how ingenious Bitcoin is. Its like when you first go to a foreign country and realize how many things you took for granted are just socially accepted conventions. Bitcoin, cryptocurrencies and blockchain are like that for rethinking money, property, governments, and lots more.
Bitcoin was first.
Bitcoin is the first cryptocurrency. It was created in 2009 under the alias Satoshi Nakamoto by a person or group of persons. Twenty-one million bitcoins can ever be issued, and around 19 million are already in circulation.
Bitcoin is the only economic entity where the supply is unaffected by the demand. Bitcoin’s hard cap is set at 21 million coins. Bitcoin’s block reward is paid out to miners who secure the bitcoin blockchain.
Bitcoins can be issued to anyone with a powerful computer: it mints them by solving complicated mathematical problems. The problems are automatically made harder to ensure that the overall supply of Bitcoins cannot grow too fast.
Bitcoin is traded and exchanged online, with transactions cryptographically authenticated and stored on the blockchain.
Shortly after the currency launched in 2009, articles spread around the internet saying that Bitcoins would protect wealth from hyperinflation and that early adopters would make a fortune.
Bitcoin was the first practical cryptocurrency to work and gain traction. However, many earlier attempts failed because the technology wasn’t there yet, and they lacked one or another of the critical components that made bitcoin work.
Bitcoin has a predictable supply. There is a limit on how many bitcoins will ever be created. Twenty-one million bitcoins will be made, of which 19 million have been created. Bitcoin value, like gold, is governed by scarcity.
The bitcoin protocol is based on:
Peer to peer networking
Proof of work consensus mechanism
Public key cryptography
