Module 1: Bitcoin
Bitcoin is often referred to as the first cryptocurrency, as it was the first application built on the blockchain technology. Today, there are many applications that are built using blockchain technology, and each application has its own unique characteristics and features.
Bitcoin has several unique characteristics that distinguish it from traditional fiat currencies (currencies issued and backed by a country’s government, with no backing by a physical commodity such as gold) and financial systems. It is these characteristics that continue to drive bitcoin’s adoption as a digital asset, an investment, a store of value and medium of exchange.
Bitcoin is an application built and operated on blockchain technology. Think of bitcoin as an application, similarly to Google and other search engines being applications for the World Wide Web. There are many applications that use blockchain technology, and each has its own unique features and solves different problems.
Bitcoin is a decentralised, digital ledger that allows for peer-to-peer exchange of value, in the form of the bitcoin currency.
To clarify, a ledger is an account of who owns what. Bitcoin transactions are broadcast to a public ledger for anyone to view, making bitcoin the most transparent monetary network ever created.
Bitcoin is ‘hard money’, meaning that its supply is fixed at 21 million. Any holder or speculative holder of bitcoin knows there will only ever be 21 million bitcoin in existence. This makes bitcoin the hardest and scarcest money ever created.
This is very different from fiat currencies, as government and central banks can choose to put more of a fiat currency into circulation at any time, thereby effectively devaluing the currency.
A core distinguishing feature is that there is no leader or group of people centrally controlling the bitcoin protocol. Bitcoin is a decentralised network of equal parties. In my opinion, it is also critical to understand that bitcoin is the most salable store of value across space and time (explained in Module 2, Lesson 3.).
Congratulations, you have completed Module 1, Lesson 4