In January 2009, Satoshi Nakamoto created Bitcoin – a global, borderless and decentralized protocol. Bitcoin offered a far superior alternative by offering a transparent and permissionless network, when compared to the existing inequitable and inaccessible financial system.
Let us seek to understand what exactly are the problems that Bitcoin set out to solve, and are solving for today.
WHAT DOES BITCOIN SOLVE?
Centralization
Bitcoin removes the need for a centralized third-party to confirm and validate transactions. Generally, there is always the government/central bank/company that acts in the role of third-party.
Bitcoin works in a peer-to-peer manner, without requiring the current base-layer financial system or a third-party to broker settlements and transfers. Decentralization is what makes and keeps the Bitcoin network safe. No other crypto comes close to Bitcoin’s level of decentralization.
Verifiability
Bitcoin brings to the table a level of validation or verifiability that isn’t really possible with fiat or any other asset class.
The network ensures that it would be impossible to create fake Bitcoin. Also, since all the miners have a copy of the entire blockchain, any attempted fraudulent activity in the network is immediately identified and rejected. Every bit of information can be verified on the blockchain and can be accessed by everyone, making Bitcoin a truly trustless network.
Inflation
Another problem Bitcoin sets out to solve, and is especially relevant today is inflation.
Bitcoin’s disinflationary monetary supply is another one of the many factors that make it the most superior asset of our times. The total supply of Bitcoin has been embedded into the code and fixed at 21 million. There cannot, and never will be any more Bitcoin than that.
Bitcoin is a true inflationary hedge – and protects your savings and purchasing power over time.
What other problems do you all think Bitcoin can solve in today’s world or in the coming future? Drop your thoughts in the comments.