Bitcoin is peer-to-peer digital money. It has a fixed supply governed by code. The network uses Bitcoin as it's unit of exchange and has a hard limit of 21 million total Bitcoin which has not and cannot be changed without the consent of a consensus of network participants. Bitcoin is the best medium of exchange and the best store of value humans have ever created. Bitcoin does not increase in value over time, it only holds its value as dollars become worthless.

 

Bitcoin can be exchanged in kind to anyone willing to accept it, in units divisible as small as the satoshi, which is 100 millionth of a bitcoin, or as large as the enitre balance of the spending user. In cases where the recipient of the money only accepts dollars or other currnecies, Bitcoin exchange markets offer sufficient liquidity to convert bitcoin into most of the world's currencies in seconds. This means that anyone can hold bitcoin, even up to 100% of their wealth, without fear that they will be stuck holding bitcoin if they ever need a fiat currency.

 

Merchants of various goods and services have begun the conversion to a bitcoin standard. Instead of or in addition to accepting worthless forms of money such as the dollar, they acccept bitcoin as payment. These bitcoin payments arrive rapidly and can be spent as soon as they arrive. Asside from fees to accellerate transactions no taxes or levies are taken on transactions. No governmental body or large banking industry is required to process payments. In an effort to protect merchants bitcoin transactions are irreversible. Merchants never have to worry about credit card chargebacks or any other form of clawback. If the merchant decides to send money back to the purchaser only they can choose to send the bitcoin back.

 

The bitcoin blockchain is a string of all the blocks which have ever been produced by the Bitcoin network, these blocks contain every transaction which has ever occured on the network. The blockchain is stored in a decentralized manner by individual users on nodes, or computers running the bitcoin software. The total size of the blockchain is very small thanks to the brilliant efforts of bitcoin's developers to keep transactions and blocksize limits small.

 

One of the few features of bitcoin that has been changed over time, is blocksize. Currently the maximum observed blocksize is somewhere between 1mb and 4mb. This means that at maximum the bitcoin blockchain can only grow at roughly 100gb per year. In practice it grows far slower since not all blocks are full of transactions. If blocks were orders of magnitude larger it would be infeasable for users to run bitcoin nodes on common computers, however gradual increases might take place in the future, with the consent of the network.

 

When users make a transaction it must be confirmed by the network. Bitcoin transactions are confirmed in blocks which occur aproximately every 10 minutes. In the event that not all transactions can be confirmed in the next block, a small portion can be paid to the miners to fairly decide which transactions will be confirmed first. Miners produce these blocks to earn a reward and to secure the network. This block must be found and confirmed by a single user due to a longstanding computer science problem called the Byzantine Generals Problem. This single user is chosen by asking all mining users to compute hash functions. The users with the most compute power generate the most blocks on average and lower compute power users rely on luck to mine a probabilisticly fair number of blocks and block rewards. Each block contains a block reward and transaction fees. The block reward only cointains new bitcoin and the transaction fee only contains circulating bitcoin. This block is then added to the blockchain and stored forever by the network.

 

One bitcoin is expensive in fiat terms. Keep in mind that only 21 million bitcoin are responsible for representing all of the value of everything that exists. However, Bitcoin is divisible to much smaller units called satoshi (sats for short) thats 8 decimal places or 0.00000001 BTC. It was programmed such that bitcoin would be large units with smaller units such satoshis or bits (100 sats). These units will one day be worth more dollars, because as we know, dollars are worthless. Bitcoin is a fixed supply asset. As more people and their worthless dollars join the system, the dollar value of all old bitcoin is bid up by new buyers who will eventually need to spend more dollars to get the same amount of bitcoin.

 

Gold is a non-digital form of bitcoin created by God to be shiny, so that early humans could understand its value. With the advent of digital communications channels, and bitcoin; gold has been demonetized. Gold can be easily counterfiet. The Bitcoin network provides perfect anti-counterfeiting measures for free to all users. Bitcoin can't be double spent like quarter in a drink machine, and it doesn't weigh 27 pounds like a bar of gold. Gold is almost a fixed supply asset, but not quite. When gold prices are low, gold miners simply don't spend as much energy on mining, so they produce less gold. But when gold prices are high, miners can kick it into high gear and mine 4X what they do in an off-year. This sets a limit on how high the gold price can go, unlike bitcoin which will produce 6.25 BTC around every 10 minutes no matter how hard the miners try.

 

Soon bitcoin miners will experience a halving, which is a 50% decrease in the block subsidy, the locked component of the block reward. Instead of 6.25 BTC per block, 3.125 BTC will be created and given to the miner. Every 210,000 blocks or roughly 4 years halving events will occur until one day the block subsidy falls to the limit as x approaches 0 rounded to 1 satoshi. Historically this decrease in block subsidy has led to a decrease in the quantity of bitcoin supplied to the market since miners are the largest net sellers of any participant. Econ 101 should tell you what happens next.

 

Politicians  have recently made efforts to incorportate bitcoin talking points into their political promises. Some promises have been positive for bitcoin others negative. Bitcoin doesn't care. Pro and con bitcoin politicans are using bitcoin for political gain. Government can't block bitcoin, but bitcoin can block government.

 

There is much more to say about Bitcoin, but I am tired, please read one of the many published works about bitcoin for more information.

 

Thanks for reading.

-ndgo