Bitcoin: Difference between revisions
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What makes Bitcoin unique is that the supply of the currency is limited (at 21 million coins) and transactions of the currency occur peer-to-peer (i.e. without the need of a central entity, such as the Bank of England). | What makes Bitcoin unique is that the supply of the currency is limited (at 21 million coins) and transactions of the currency occur peer-to-peer (i.e. without the need of a central entity, such as the Bank of England). | ||
The main benefit of transacting on a peer-to-peer, decentralised network (rather than a centralised network) is that there is no real single point of failure. In a centralised network, if the central entity fails, then the whole network fails (i.e. there is a single point of failure in the network), whereas in decentralised network, becasue there is no central entity, there is no real single point of failure, and therefore the currency is likely to last for much longer, possibly forever. | The main benefit of transacting on a peer-to-peer, decentralised network (rather than a centralised network) is that there is no real single point of failure. In a centralised network, if the central entity fails, then the whole network - and currency - fails (i.e. there is a single point of failure in the network), whereas in a decentralised network, becasue there is no central entity, there is no real single point of failure, and therefore the network - and currency - is likely to last for much longer, possibly forever. | ||
For example, the world's first ever currency is the Mesopotamian shekel, and it was operated by a central entity (Lydia). When the central entity failed, so did the currency. | |||
Another key benefit of a decentralised network is that transaction costs are lower. | Another key benefit of a decentralised network is that transaction costs are lower. |
Revision as of 15:09, 20 March 2022
Summary
- Bitcoin is a currency.
What is Bitcoin?
Bitcoin is a currency.
What's unique about Bitcoin?
What makes Bitcoin unique is that the supply of the currency is limited (at 21 million coins) and transactions of the currency occur peer-to-peer (i.e. without the need of a central entity, such as the Bank of England).
The main benefit of transacting on a peer-to-peer, decentralised network (rather than a centralised network) is that there is no real single point of failure. In a centralised network, if the central entity fails, then the whole network - and currency - fails (i.e. there is a single point of failure in the network), whereas in a decentralised network, becasue there is no central entity, there is no real single point of failure, and therefore the network - and currency - is likely to last for much longer, possibly forever.
For example, the world's first ever currency is the Mesopotamian shekel, and it was operated by a central entity (Lydia). When the central entity failed, so did the currency.
Another key benefit of a decentralised network is that transaction costs are lower.
Competition
Item | Bitcoin | Ether | US Dollar |
---|---|---|---|
Does the currency operate on a decentralised network? | Yes | Yes | No |
Is the supply of the currency limited? | Yes | No | No |
High likely is the currency to act as a store of value? | High | Low | Low |
Item | Bitcoin | Ether | XRP |
---|---|---|---|
Does the currency operate on a decentralised network? | Yes | Yes | No |
Is the supply of the currency limited? | Yes | No | No |
High likely is the currency to act as a store of value? | High | Low | Low |
Actions
To invest in Bitcoin, click here.