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What is bitcoin?
Bitcoin is digital money native to the internet.
It utilises a transparent public ledger (known as a blockchain), which allows all participants in the bitcoin network to verify transactions and come to a consensus on who owns what. This transparency means that there is no requirement for a trusted central authority to facilitate transactions between two parties. This means that two parties can transact directly with one another - no one and no thing can stop this bitcoin transaction from occurring. Once initiated, it is verified by the bitcoin network, and then digitally recorded on the public blockchain for all to see, revisit and review.
A simplified example of this open ledger transparency is a game of monopoly, where each player can see who passes "GO" and collects $200, who lands on someone else's property and pays rent, and who inherits $100 from an uncle's passing. If, after each move, players wrote down what happened and what transactions were made, as the game progresses, anyone at any time can revisit this ledger and verify everyones balances. They aren't required to "take someone's word for it".
One of the key features of bitcoin is its programatic monetary policy. This has been identified as one of the key drivers of adoption over the past few years, where we have seen incredible regimes of money printing across most major currencies. In effect, each of these currencies are losing value, and people holding these currencies are witnessing the erosion of their wealth and purchasing power. Such monetary policy decisions are made by central authorities around the world (central banks and governments) without any set schedule and with no guarantees. In reality, the number of dollars that could be printed into existence is infinite, so the value of these dollars has no bottom.
In contrast, there will only ever be 21million bitcoin in existence. There are currently around 19M bitcoin in circulation, and the path to this magical 21 million is written in code for all to see. Newly printed (or "mined") bitcoin will follow a set schedule of release until the 21 millionth bitcoin is created. And then... no more.
The exact policy on issuance of future bitcoin, and the mechanism by which that occurs, is very important to the security and robustness of the network. It is quite complex, so we encourage you to learn about bitcoin here.
You can own a fraction of a bitcoin, in fact, 1 bitcoin is divisible into 100,000,000 units, which are referred to as "satoshis" or "sats" - affectionately named after Satoshi Nakamoto, the inventor of bitcoin. The beauty of Satoshi Nakamoto's technology is not something that can be fully appreciated simply by reading a few articles and watching a couple of videos. But over time, with enough exposure to good quality content, it will become clear why some of the most talented individuals from every industry are leaving their jobs to concentrate on bitcoin. 99 Bitcoins provide a brilliant introduction to bitcoin which now has over 5 million views. Check it out below ⬇️
If you are interested in understanding how to buy bitcoin in Australia, check out this article which runs you through the many things to consider when you buy bitcoin.
To start your bitcoin journey within your business, get in touch with us today.
What is the Lightning Network?
Soon enough, you won't be able to talk about bitcoin without discussing the Lightning Network.
The Lightning Network is a "layer-two" solution built on top of the Bitcoin network. This means it has been developed separate to the Bitcoin network, but interacts directly with it. It’s made up of an incredibly large system of channels that allow people and businesses to move money between one another without needing to use the blockchain to verify the transaction.
To learn more about the Lightning Network, check out this video from bitcoin OG Anthony Pompliano (an incredible bitcoin advocate and valuable source of information on bitcoin - give him a follow on Twitter).
The future is filled with uncertainty, but a huge number of people around the world feel a deep sense of hope and excitement when the topic of bitcoin is brought up.
To find out how to buy bitcoin in Australia, or to integrate bitcoin into your business, please get in touch with our team.