There are many different answers possible to this question. Is bitcoin digital money? Is it a technology? An investment? An ideology? Or a little bit of everything?
Bitcoin is the name for the currency. There are 21 million bitcoins, each divided into 100,000,000 pieces, called "satoshis" or "sats" for short. You can buy, sell, store, send and use these in some places to pay.
Bitcoin is also the name for the network, made up of tens of thousands of computers worldwide, and the protocol with the rules that transactions must follow in order to be accepted.
We would like to sum it up like this: Bitcoin is a global monetary system that is still in its infancy.
We have to explain those infancy. It is not yet ready for daily use as a means of payment by the large crowd. It’s not user-friendly enough, there’s too much friction and hassle. That’s okay, the protocol is designed in such a way that it still has ten years to mature.
However, that does not mean that bitcoin does not work. On the contrary, it has been doing exactly what it’s supposed to do for almost 12 years now. It is open, without borders, neutral and censorship resistant and public. You don’t need permission to participate, and no one is in charge.
The essence of bitcoin is ‘digital scarcity’. Normally everything that is digital can be copied: documents, photos, software, MP3. Bitcoin is also digital, but incorruptibly scarce. There are only 21 million (divided into 100,000,000 pieces), and that’s it. Of those 21 million, about 18.5 million are currently in circulation, with 900 more being added every day.
This provides ‘revolutionary money’ with pleasant properties, such as:
* easy to transport * easy to check authenticity * divisible into small pieces * does not rot or burn * scarce, government cannot print it uncensorable
Bitcoin is currently mainly used for saving. This is where it really comes into its own as central banks are looking for more inflation and investors are looking for assets to protect against it. Bitcoin also lacks the risk of a commercial bank going bankrupt, causing you to lose some of your assets.
In short, bitcoin is not a pyramid scheme or hot air. It is a very young technology with great potential. In some countries, people already use it on a daily basis, because it is already better there than the ramshackle money system there. In the Netherlands it still mainly fulfills the role of digital gold.
In this article we will look at some aspects of bitcoin in more detail, and refer to further in-depth information at the end.
Be your own bank
On October 31, 2008, an unknown individual or group of individuals under the pseudonym Satoshi Nakamoto published a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System".
The introduction begins with an explanation of the title. It is the explicit intention that payments are made directly from one party to another, without the intervention of a financial institution.
A money system where no one is in charge, and which is designed in such a way that it is attractive for participants to follow the rules. The building blocks are not new, but all together it is revolutionary!
On January 3, 2009, the first page of bitcoin’s cash book was signed. Or in technical terms, the first block of the blockchain was published. It would take another 6 days for the next block, the first normal block, to be added to the genesis block. Since then, there has been a block roughly every 10 minutes.
In the first block, Satoshi Nakamoto refers explicitly to the bail-outs of the banks in the 2008-2009 crisis.
It is along this line that some Bitcoiners advocate "unbanking the banked", a parody of the Western financial sector’s missionary aspiration to give everyone access to financial services, thus lifting them out of poverty: "banking the unbanked". .
Bitcoin’s antithesis suggests that being "banked" is not at all pleasant. They’re crooks, those bankers. You can better be your own bank. Be your own bank.
Every year on January 3, bitcoiners celebrate the birthday of bitcoin by organizing a bank run: they all withdraw their bitcoins from trading platforms at the same time to see if they are not secretly doing fractional banking.