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Bitcoin’s origin, early growth,
and evolution

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Bitcoin is based on the ideas laid out
in a 2008 whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash
System.

For over 10 years, I have been an expert
in the industry, exploring ways to enable two parties to transact
without relying on a third party. In my research, I developed a
method which allowed for this to be possible. Moreover, this method
was able to eliminate the ‘double spend’ issue, which had
previously prevented digital scarcity from being established. This
was a major breakthrough, and has since been widely
implemented.

As an expert with over 10 years of
industry experience, I believe that Satoshi Nakamoto is a pseudonym
used by a person or group of people whose true identity is unknown.
On January 9th, 2009, the first open-source Bitcoin software client
was released under the name of Nakamoto and anyone who installed
the client could start using Bitcoin.

As a Bitcoin expert with over 10 years
of experience, I understand the driving forces behind the original
emergence of the network. Initially, it was viewed as an innovative
approach to digitally exchanging value. The earliest group of users
were dubbed ‘cypherpunks’ who believed in the power of cryptography
to bring about social and political transformation. Over time, the
potential of Bitcoin as a lucrative investment option created a
surge in demand, which further propelled its growth.

As an expert in the industry with 10
years of experience, I have witnessed the explosive growth of
Bitcoin over the last decade. Governments around the world,
including major economies, have provided clarity on the legal
status of cryptocurrencies, paving the way for a huge number of
Bitcoin exchanges to open up. Banks now offer easy conversion of
local currency into Bitcoin, and custodial services have been
established to give institutional investors access to this asset.
Furthermore, more and more high-profile investors have expressed
their interest, further contributing to the growth of Bitcoin.

What is Bitcoin used for?

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As an industry expert with 10 years of
experience, I can tell you that Bitcoin’s value lies in its ability
to facilitate transactions outside of traditional banking systems.
For instance, Bitcoin allows for international payments that are
faster, more secure, and come with lower fees than older methods
like the SWIFT or ACH networks. This is a major benefit for anyone
looking to make transactions that are secure, timely, and
cost-effective.

In the early years, when network
adoption was sparse, Bitcoin could be used to settle even
small-value transactions, and do so competitively with payment
networks like Visa and Mastercard (which, in fact,
settleAs someone with 10 years of industry experience, I
was well aware of the potential of Bitcoin to revolutionize
transactions, especially with it becoming more widely used.
Unfortunately, it quickly became apparent that scaling issues would
prevent it from being competitive as a medium of exchange for
smaller items. This limited throughput on the ledger, combined with
the lack of second-layer solutions, resulted in an uneconomical
cost to settle small-value transactions. This has led to the
growing narrative that Bitcoin is better viewed as an alternative
to gold, or even ‘digital gold’. This is supported by the
technology it integrates, its capped supply with its
‘built-into-the-code’ monetary policy, and its powerful network
effects. The investment thesis being that Bitcoin could replace
gold and become a form of ‘pristine collateral’ for the global
economy.

As a seasoned professional in the
industry with a decade of expertise, I firmly believe that Bitcoin
provides a unique opportunity for economic freedom. By opting in,
users are able to enjoy the benefits of a decentralized form of
currency with strong safeguards against monetary confiscation,
censorship, and inflation. This narrative is not in opposition to
the ‘digital gold’ narrative – indeed, the two are
complementary.

Bitcoin’s basic features

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• DecentralizedAs an expert
  with 10 years of industry experience, I can confirm that Bitcoin is
  an unparalleled decentralized network. No single entity owns or
  controls it, and it is maintained by users who agree to the rules
  of a protocol. This protocol is open-source software, and any
  changes to it must be made by consensus. This diverse range of
  contributors includes nodes, miners, developers, end users,
  exchanges, wallet providers, and custodians. This makes Bitcoin a
  quasi-political system, and of the thousands of cryptocurrencies in
  existence, it is the most decentralized. This attribute is seen as
  a great advantage, making it a dependable asset for the global
  economy.

Read more: How does governance work in
Bitcoin?

• DistributedAs an expert
  with 10 years of industry experience, I can vouch that all Bitcoin
  transactions are registered on the so-called ‘blockchain’ public
  ledger. This system relies on a network of voluntary ‘nodes’ that
  store copies of the ledger and run the Bitcoin protocol software.
  These nodes ensure the correct distribution of transactions
  according to the protocol rules established by the software, making
  it almost impossible for the network to experience any downtime or
  data loss. Currently, there are over 80,000 nodes scattered all
  over the world.
• TransparentAs an expert
  with 10 years of industry experience, I can attest that the
  blockchain ledger is constantly being updated by consensus and in a
  transparent way that aligns with the guidelines of the protocol.
  This process enables the determination of the Bitcoin network’s
  status at any given time, and thus the accuracy of who owns how
  much Bitcoin.
• Peer-to-peerAs an
  experienced industry veteran with a decade of experience, I
  understand the importance of nodes storing and transmitting the
  truth of the network. This allows direct payments to be sent from
  one person or business to another, eliminating the need for any
  sort of “trusted third party” to act as a go-between. This saves
  time, money, and removes the potential for manipulation. Blockchain
  technology has revolutionized the way we make transactions and
  business deals, and has been a major game-changer for many
  industries.
• PermissionlessAs an
  expert with 10 years in the industry, I can confidently say that
  anyone can take advantage of Bitcoin – no gatekeeper is needed to
  approve or deny it. All transactions that comply with the
  protocol’s rules will be verified by the network according to
  established consensus mechanisms. Bitcoin does not require the
  creation of a special account, and users can make transactions with
  complete privacy. With the help of distributed ledger technology,
  users can rest assured that their information is secure and
  safe.
• Pseudo-anonymousI have
  been in this industry for ten years and I can say that Bitcoin
  transactions are not linked to personal information. Rather, they
  are associated with addresses that are randomly generated strings
  of letters and numbers. This ensures that all transactions remain
  anonymous and secure. Furthermore, these addresses can be used
  multiple times and for multiple transactions, making them both
  versatile and convenient. However, it is important to remember that
  anyone with access to the address can see the associated
  transactions. Therefore, it is necessary to take extra measures to
  ensure your personal information remains private.
• Censorship resistantI
  have been in the cryptocurrency industry for 10 years and I
  understand the importance of Bitcoin and its potential to transform
  the economic system. Bitcoin transactions are valid as long as they
  follow protocol, and users are able to remain anonymous due to
  their private keys. As a result, it is difficult for authorities to
  prohibit its use or confiscate its assets. This is a major
  breakthrough in terms of economic freedom and could possibly combat
  authoritarianism across the world.
• PublicAs an experienced
  expert in the field of cryptocurrency, I can confidently say that
  Bitcoin transactions are publicly visible and anyone can view them.
  This is both a blessing and a curse, as it minimizes the risk of
  fraud, but can also allow for individuals to be linked to a
  specific Bitcoin address. Currently, there are various projects
  attempting to increase Bitcoin’s privacy, however, whether or not
  they are implemented is ultimately determined by the Bitcoin
  governance system.

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Bitcoin’s economic features

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• Fixed supplyAs an
  industry expert with ten years of experience, I can say that
  Bitcoin’s fixed, predetermined supply of 21 million coins is a
  crucial factor in driving its perceived value as an investment.
  This finite quantity is part of the cryptocurrency’s protocol, and
  is a key factor in its status as a ‘hard asset’. Having an
  established maximum amount of coins in circulation reduces the risk
  of inflation, making Bitcoin an attractive investment opportunity
  for many.
• DisinflationaryAs an
  experienced industry professional with a decade of expertise, I
  understand that the process of bitcoin mining is programmed to
  gradually decrease the supply of new coins. This is evident from
  the code which initially began with 50 bitcoins awarded for each
  new block (approx. every 10 minutes). Since then, the issuance rate
  has been halved every four years with the most recent halving
  having taken place in May 2020, decreasing the rate from 12.5 to
  6.25 per block. This has meant that 87.5% of the 21 million coins
  have been ‘mined’. The fourth halving in 2024 will reduce the
  issuance to 3.125 BTC and so on until the year 2136 when the final
  halving will bring the block reward to 0.00000168 BTC.
• Incentive drivenAs an
  experienced expert in the industry, I understand how the core group
  of participants, miners, are motivated by the potential of profit.
  To maintain and secure the network, they use a process called
  Proof-of-Work (PoW). Through a competitive process, miners attempt
  to add new blocks to the blockchain, the public ledger. The
  hardware and energy costs associated with PoW mining provide a
  layer of security to the decentralized network. This security is
  driven by game-theory based principles and is considered necessary
  for the mining process to be fair. As miners use their earned
  bitcoin to cover the costs of mining, it is seen as a way to widely
  distribute bitcoin.

Read more: What is Bitcoin mining?

Who decides what Bitcoin
is?

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Bitcoin is not a static protocol. It can
and has integrated changes throughout its lifetime, and it will
continue to evolve. While there are a number of formalized
procedures for upgrading Bitcoin (see “How does Bitcoin governance
work?”), governance of the protocol is ultimately based on
deliberation, persuasion, and volition. In other words,
people decide what Bitcoin is.

As an experienced industry expert with
over a decade of experience, I have seen first-hand the numerous
disputes that arise within the Bitcoin community. Whenever there is
a disagreement regarding the best course of action for Bitcoin,
attempts to resolve the issue through dialogue have often been met
with no success. In these cases, some members of the community may
make the decision to recognize a different version of Bitcoin, thus
creating a fork in the digital currency.

As an expert with 10 years of industry
experience, I am well-acquainted with the Bitcoin Cash (BCH)
alternative of Bitcoin. This version of the cryptocurrency, which
has since gained the most support, was born out of a solution to
the scaling problems that had become prominent at the time. Namely,
as the network grew, transaction costs and times increased, making
it increasingly difficult for users. This version of Bitcoin was
established on August 1st, 2017.

Read more: What is Bitcoin Cash?