BITCOIN

WHERE DID BITCOIN COME FROM?

Bitcoin was invented by Satoshi Nakamoto after the great financial crisis in 2008. Bitcoin can simply be described as a divisible, scarce, easily transferable and unhackable form of digital money that lives on the blockchain - some call it digital gold. People call it this because Bitcoin is limited in amount (scarce) - as is gold, and is therefore considered to be a great store of value (which means it is an asset that holds value like gold or art). Satoshi Nakamoto programmed Bitcoin so that only 21 million digital coins will ever be created - ever - that’s it. This makes Bitcoin an incredibly scarce asset. Many have argued that Bitcoin is more rare than gold due to the fact the supply of gold increases roughly 2% per year. vs the supply of Bitcoin which will never go higher than 21 million. Bitcoin is created by miners who are rewarded (with Bitcoin) by the bitcoin network to create new “blocks” every day. Every 4 years, Bitcoin goes through what is called a “halving cycle” meaning that the amount of Bitcoin that can be mined will be reduced by 50% every 4 years until we reach 21 Million tokens. Bitcoin mining will permanently end in the year 2140 when 21 Million coins will have been mined - this will be the only supply forever.

In the early days of Bitcoin, almost everyone dismissed Bitcoin as “magic internet money” or as some kind of joke. So what has changed? Well - every day it seems more and more companies are saying that Bitcoin is real and should be taken seriously. Companies like Tesla are converting billions of their cash into Bitcoin because they believe that it is a better asset. Tesla believes that its cash will decrease in value earning virtually no interest in the bank vs buying into Bitcoin which says that Bitcoin will increase in value over time due to its continued widespread adoption and rarity. Other organizations including the Oakland A’s and the Dallas Mavericks have done the same! Some experts say that because of the all the money printing and new cash being injected into the US financial system, Bitcoin acts as a shield against what could be a massive inflation cycle ahead. Inflation is a complicated economic term which tells us when prices for goods and services are rising too quickly. When inflation appears, it lowers the power we all have to buy things at reasonable prices - making our US dollars worth less. Swan Bitcoin summarizes it best in the below article:

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