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 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.
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
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