Bitcoin

Summary

• Bitcoin is a currency.

What is Bitcoin?

Bitcoin is a currency.

What's unique about Bitcoin?

What makes Bitcoin unique is that transactions of the currency occur peer-to-peer (i.e. without the need of a central entity, such as the Bank of England), and the supply of the currency is limited (at 21 million coins).

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 the network. 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 known currency is the Mesopotamian shekel, and it was operated by a central entity (The Kingdom of Lydia). When the central entity failed, so did the currency.

Another key benefit of transacting on a decentralised network is that transaction costs are lower.

Competition

Currency 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

Cryptocurrency competition

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.