What is Bitcoin?

Origins

Bitcoin was developed by a pseudonymous programmer in 2009 named Satoshi Nakamoto. Nakamoto sent an email to a small group of software developers containing the original Bitcoin White Paper. The paper describes the Bitcoin protocol as a "purely peer-to-peer version of electronic cash" that allows "online payments to be sent directly from one party to another without going through a financial institution."

Bitcoin replaces the need for trusted, centralized financial entities with shared knowledge and open-source algorithms. Every entity, or node, in the Bitcoin network carries a complete history of every single transaction that has taken place on the network. Every user has the ability to see how many accounts exist and the number of Bitcoins in each account. While these accounts are publicly verifiable, they contain no personally identifiable information, making transactions on the network pseudo-anonymous.

At the highest level, Bitcoin is simply a shared list of transactions.  Bitcoin has no inherent meaning or value on its own, but allows users of the protocol to interact in a trustless yet secure manner. This works based on a system called blockchain technology, but we won't get into the technical details of how it works just quite yet.

Yes

This chart might look familiar, but this time we are comparing government issued dollars with Bitcoin.

Dollars

Bitcoin

Durability

Somewhat durable but suseptible to fire

Impossible to destroy

Divisibility

Up to two decimal places

Up to 8 decimal places

Portability

Lightweight paper

Weightless and accessible from anywhere

Recognizabilty

Distinguishable but prone to counterfeit

Provably unique

Scarcity

No set maximum supply

Mathematically fixed supply

Bitcoin has been around for 12 years now, so what have we learned, and where can we go from here?

Perfect Monetary Commodity

As the future is inherently uncertain, humans attempt to store wealth to plan for the unknown. Before Bitcoin, there was no good that is completely and verifiably scarce. While more gold can always be mined and more dollars can always be minted, the code controlling the Bitcoin network does not allow more than 21,000,000 Bitcoins to ever be created. This is possible through a disinflationary supply schedule that halves the block reward (incoming supply) every four years. This means that one person's stake in the network cannot be devalued over time in nominal terms.