Before anything, Bitcoin is an Internet protocol which represents a fundamental breakthrough in computer science offering humanity a revolutionary new technology, perhaps the most important invention since the Internet - based on open-source software. Be sure to note that the Bitcoin Network is NOT a company, is NOT a shiny gold coin, and is NOT a Ponzi scheme.
The official Bitcoin White Paper was released to the general public on October 31, 2008 which in-great-technical-detail described groundbreaking innovation within the financial technology sector: A Peer-to-Peer Electronic Cash System.
Upon public deployment of the open-source software on January 3, 2009, the protocol provided hard-evidence of an active and verifiable technology solution to a very complex double spend problem that has baffled technologists and cryptographers around the world for more than thirty years.
The invention of the Bitcoin network now enables peer-to-peer digital and global value transfer without the need of a third-party intermediary, eliminating the need for trust.
As a key feature rather than a flaw, the Bitcoin network is decentralized with no central point of failure.
The globally distributed public ledger or transparent database is a real-time consensus log of all transactions on the network which are updated [24x7x365]. All transactions are verified, timestamped, locked into 1MB data blocks, and ultimately chained together as a historical and immutable record.
This new underlying technology is what's referred to as blockchain technology - Bitcoin; THE Blockchain.
In the most basic translation, the Internet now has a public value transfer layer; via Bitcoin protocol. You may be familiar with other protocols; SMTP otherwise known as e-mail or HTTP which is the foundation of data communication for the World Wide Web. This protocol is more than a consensus and value transfer network but simultaneously a new type of money.
The Bitcoin network has two main top layers; bitcoin wallets and bitcoin exchanges which are public-facing consumer and investor onramps.
All transactions on the Bitcoin network occur exclusively with bitcoins; the network-issued, scarce cryptocurrency which leverages military grade cryptography.
The Bitcoin network software protocol has a pre-set mathematical hard cap of 21 million bitcoin that will ever be issued over a period of 131 years, 16,584,825 of which have already been mined and are in global circulation. Some industry experts suggest somewhere between 5 - 15% of bitcoin (private keys) have been lost forever - further limiting the supply.
Divisible by eight decimal points; 1.74835692 - the digital currency; bitcoin is a versatile digital cash for value transfers worldwide and has organically transitioned into a multi-use case digital asset. A new kind of money.
BTC is the common industry abbreviation when referencing Bitcoin as a currency. The ISO 4217 currency code is currently XBT which is still considered unofficial. The Unicode character U+0243 is being promoted for global online publication while the International font-and-css toolkit organization; FontAwesome created .
As a compensation mechanism for verifying transactions across the Bitcoin network, bitcoin miners are rewarded newly-minted bitcoins [block rewards] every ten minutes in exchange for their participation.
The protocol auto-adjusts the bitcoin mining difficulty based on real time participation data and boasts a deflationary money supply or "monetary policy" in which the Bitcoin network mining block reward is programmed to decline 50 per cent approximately every four years; 50 (2008) 25 (2012) 12.5 (2016) and only 6.25 bitcoin (by 2020) will be released. This programmed scheduled release is based on ten minute cycles.
Bitcoin Miners compete via rare, expensive, and specialized hardware to run the Bitcoin software to verify and add transactions to the ongoing "blocks" of transactions via "proof of work" to determine a "global consensus" of record of "transactions" in exchange for the reward; newly minted bitcoins. Bitcoin network participants gain market share so-to-speak by their sum of equipment and raw computational power which is required to solve the highly complex mathematical equations.
Bitcoin nodes use the "block chain" (a chain of blocks filled with historical network transactions) to distinguish legitimate transactions verses bitcoins which have already been spent. Miners often sell their inventory direct to established Bitcoin Exchanges which effectively creates the supply-side life cycle and subsequently the markets are made via awaiting buyers/users who exchange fiat-currency for BTC.
Industry analysts suggest the Bitcoin network now exceeds Google in computing power by 100X. Similar to email, you would need to shut down the entire global Internet for the Bitcoin network to be temporarily muted. There are ten thousand mining and non-mining nodes spread out around the world.
Not only are bitcoins impossible to counterfeit, transactions can not be blocked or frozen and there are no prerequisites or arbitrary limits to participate.
As with any new revolutionary technology or scientific breakthrough, venture capitalists and professional investors are never far behind the wave of exciting headline news.
As of 9/22/2017 there has been more than USD $1.89 BILLION invested into hundreds of Bitcoin related companies worldwide to boost the emerging technology infrastructure through it's global operational and security foundation; bitcoin mining and the two main top layers of the Bitcoin network; bitcoin wallets and bitcoin exchanges.
Through a concentrated effort to form legal business entities with technology and financial services experts, as well as the consistent organization of professional industry associations, meet-ups, conferences, and startup incubators, the Bitcoin industry has significantly matured in a few short years.
The common denominator among both investors and executives within the industry is to establish a balanced environment where innovation can flourish while simultaneously ensuring that bitcoin startups are abiding by any local, state and Federal regulations.
The world has never seen anything like Bitcoin. And subsequently, Bitcoin is many things to many people.
Not only is the Bitcoin network thriving, it is legal.
Due to the secure and proven operational foundation of the network itself, alongside a limited supply of the digital currency; bitcoin, interest has grown astronomically.
New use cases, upgrades in both software and hardware, human and venture capital migration, intuitive and secure apps, as well as a network effect has sparked curiosity and driven demand throughout the world, and subsequently, bitcoin has outperformed every asset on Earth.
Similar to stocks or commodities, bitcoin trades on bitcoin exchanges with a market value exchange rate which fluctuates in real-time based on supply, demand, psychology, as well as news.
Many years ago, one single bitcoin [1 BTC] traded at USD $0.008 and today [Q3 / 2017] is pegged above USD $7,000 with a market cap exceeding USD $120 BILLION.
The Bitcoin network is freely accessible to any human on Earth and is not affiliated with geographical borders, political interests or central banks.
The revolutionary open-source software and global network community do not judge your skin color, ethnicity, religious beliefs, and do not have access to your financial status, confidential data or credit score.
Banks close at 5 PM.
Wall Street closes at 4 PM.
Bitcoin does not close. Ever.
So, "What is bitcoin?" may be a better explained in bullets:
Remember, Bitcoin is many things to many people.Bitcoin is 24x7x365
Bitcoin is global
Bitcoin is technology
Bitcoin is open-source software
Bitcoin is an internet protocol
Bitcoin is a distributed public ledger
Bitcoin is a cryptographic network
Bitcoin is peer-to-peer value system
Bitcoin is a payment layer for the Internet
Bitcoin is modern medium of exchange
Bitcoin is a speculation platform
Bitcoin is a geo-political hedge
Bitcoin is a fiat-currency hedge
Bitcoin is electronic cash
Bitcoin is digital currency
Bitcoin is crypto-currency
Bitcoin is a new global asset class
Bitcoin is a digital commodity
Bitcoin is virtual property
Bitcoin is gold 2.0
Bitcoin is money
Bitcoin is hard money Bitcoin is consensus
Bitcoin is mathematics
Bitcoin is innovation
Bitcoin is financial inclusion
Bitcoin is censorship resistance
Bitcoin is freedom
Bitcoin is ...a revolution
It is important to keep in mind that there is no correct or incorrect use case with the Bitcoin network. And of course depending on whether you're referencing B-BITCOIN (the NETWORK) or b-bitcoin (the ASSET), the conversation and adjectives may be somewhat confusing. The open-source technology platform was designed, developed, and delpoyed as an "open platform" and community for the world for your personal benefit and specific use case - whatever that may be.
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