1. Limited supplyIn summary, the quantity of Bitcoin is fixed and subject to strict restrictions

1. Limited supply

In summary, the quantity of Bitcoin is fixed and subject to strict restrictions. This number can never increase. This limited supply is the main advantage of Bitcoin and a source of its value.

Bitcoin (BTC) was created by an anonymous creator under the pseudonym Satoshi Nakamoto in response to the 2007-2008 financial crisis caused by excessive money supply and dishonest financial engineering. In order to prevent such crises and inflation from leading to currency depreciation, it is necessary to create a currency with strict definitions, unchanged, fixed, and a certain supply. The quantity of Bitcoin is strictly defined in the algorithms (software) that manage the operation of Bitcoin networks (21 million units).

Approximately every 10 minutes, new Bitcoins are generated (referred to as blocks as a reward for approving the next entry in the ledger as a 'miner'), but the number of newly created Bitcoins decreases every 4 years, a process known as' halving '. Initially, 50 Bitcoins were created every 10 minutes, but now it is 6.25 BTC. In April or May 2024, the next 'halving' will occur, producing slightly more than three bitcoins every ten minutes (3.125). Subsequently, there will be a halving in areas such as 2028, 2032, and 2036. By 2034, 99% of the 'coins' will have been issued. For example, by 2060, only 0.006 BTCs would be created every 10 minutes. The last batch of coins will be issued around 2140 AD. The exact timetable and emission scale for the future "halving" can be found here: [link provided].

This supply is strictly defined and cannot be changed.It can never change. No one, whether an individual or an institution, can "print" additional Bitcoin or increase the quantity of Bitcoin in a computer system (which is common in traditional currencies).

2. Insufficient quantity

In summary, the quantity of Bitcoin is very small, and most of it is already in circulation.

The quantity of Bitcoin is not only limited, but also relatively small. The final quantity is21 million(to be achieved in 2140), with overnineteenWan is already in circulation (the exact number can be found here:
https://blockchain.info/q/totalbc. . It is estimated that approximately 5% -20% of Bitcoin has been permanently lost (their owners have lost the opportunity to access them).

In the next 100 years, the production of Bitcoin will not exceed 1.5 million units. As mentioned earlier, this number cannot be increased. Therefore, the supply of new coins (inflation) is constant and systematically decreases (ultimately to zero). Meanwhile, at least so far, demand is steadily increasing. An increase in demand and a decrease in supply will have a significant impact on prices.

3. Decentralization

In summary, Bitcoin is decentralized and not controlled by any central entity.

In order to create a fixed supply of currency, it is necessary to abolish a "central institution" responsible for issuing currency. Otherwise, the supply will not truly be fixed. Even if a 'central institution' promises to limit the money supply, this promise may be broken (as often happens in entities issuing traditional currency). This is exactly what Nakamoto wants to avoid.

Therefore, it is necessary to create a currency that will not be issued by "central institutions" (banks or countries), that is, dispersed currency.

However, with the decentralization of currency (attempts to create currency began earlier), a problem known as "double spending" has emerged. In the case of dispersed currencies, there is no central registry to store individual account and transaction balances. For example, in the case of traditional currencies, this data is recorded in the central registry maintained by banks. If the bank's customer wants to transfer funds, the bank confirms that customer A has funds and then transfers the funds to customer B, updating the entries in the central registry.

If there is no central institution, there will be no central record of balances and transactions, includingDouble expenditureThe issue of.

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At the same time, the mechanism benefits the most powerful computers (miners with more powerful computers have a greater chance of verifying blocks, thus mining new coins). This has led to an "arms race", and the Bitcoin network has become increasingly powerful as a result. Currently, the Bitcoin network is supported by millions of computers, whose combined computing power is several hundred thousand times larger than the best supercomputers.

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This private key or a combination of 12 words is 100% secure, but it is also the only protection for your wallet. On the one hand, only this data allows you to access your funds anytime, anywhere (and distribute them) without requiring any additional verification. Therefore, all the information required to access Bitcoin can be written on a piece of paper or remembered.

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This also means thatTransaction security. Once the transaction is positively verified, it is final. It cannot be cancelled or revoked. No one can freeze, stop, or block effective transactions (including law enforcement agencies, courts, banks, etc.). If the transaction meets the requirements of the network (mainly because the sender has the funds they are sending), it will be executed and irreversible.

5. Portability

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6. How to get started

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After purchasing Bitcoin, it should be transferred to an "external wallet", which is a wallet created directly in the Bitcoin blockchain. Only in this way can you truly own Bitcoin, access a wallet protected by 12 words, and fully enjoy the benefits of Bitcoin mentioned above. An example of such a wallet can be found here: [link provided]. Other wallets can be found here: [link provided].

When should you purchase Bitcoin? If you believe that Bitcoin is a long-term investment and do not intend to use it for trading or speculation, then this classic proverb applies:The best time to buy Bitcoin was 10 years ago, and the second best time is now

Everything I write is not financial or investment advice. No matter what you do, you must bear the risk yourself. However, it is true that those who purchased Bitcoin and held it in an external wallet for at least 2-3 years (without losing 12 words) did not lose in that transaction. No one, never!