{"id":7942,"date":"2022-09-26T17:40:48","date_gmt":"2022-09-26T17:40:48","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=7942"},"modified":"2022-09-26T17:40:48","modified_gmt":"2022-09-26T17:40:48","slug":"bitcoin-ultimate-sound-money","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/09\/26\/bitcoin-ultimate-sound-money\/","title":{"rendered":"Bitcoin – Ultimate Sound Money"},"content":{"rendered":"\n

Before we jump down the Bitcoin rabbit hole, let\u2019s make a distinction: Bitcoin (with capital B) refers to its money system – whereas bitcoin (lowercase b) refers to its units – the money itself.<\/p>\n\n\n\n

Bitcoin was the first cryptocurrency to find a successful solution that ticks all the boxes of sound money with none of the risks of a single controlling authority. <\/p>\n\n\n\n

Let\u2019s explore how it achieves those two things.<\/p>\n\n\n\n

Achieving Trust<\/h3>\n\n\n\n

By far the most revolutionary aspect of Bitcoin is that it requires exactly zero trust in a central authority – which as we\u2019ve learned, has led to ludicrous national debts driven up by catastrophic financial crises (2008), and the impact of the Covid Pandemic (2020).<\/p>\n\n\n\n

Bitcoin solves the trust issue by taking control of the monetary system out of one pair of hands – the central authorities’ – and into many hands of a wide network of dispersed users, none of whom have ultimate control. This is what the term decentralised<\/em><\/strong> means.<\/p>\n\n\n\n

Of course Bitcoin did have a creator, (we\u2019ll learn more about them in the next lesson) but the greatest gift they gave was to remain anonymous and relinquish any control, understanding that Bitcoin could only succeed as trusted sound money, controlled by the many, not the few.<\/p>\n\n\n\n

All these users locally run some software that maintains the Bitcoin network, creating an ongoing consensus of every user\u2019s balance of bitcoin. All Bitcoin transactions are final and can\u2019t be arbitrarily reversed unless all users agree, so as the network grows, it becomes more secure.<\/p>\n\n\n\n

These users (also known as Nodes) are incentivised to support the network and maintain its accuracy.<\/p>\n\n\n\n

The use of cryptography secures transactions against fraud and theft, while allowing anyone to mathematically verify the correctness of all transactions in the system.<\/p>\n\n\n\n

You can\u2019t bribe maths. No matter how much you try to sweet-talk, massage, or threaten an equation, you won\u2019t change its result. So in retrospect, it really shouldn\u2019t be so surprising that maths – combined with computing – was the answer to the problem of trust in the money system.<\/p>\n\n\n\n

Bitcoin\u2019s design makes it impossible to freeze, seize, spend someone else\u2019s coins, or to spend the same bitcoin twice. If you try to double-spend your coins, only one of the transactions will go through – any others will fail;<\/p>\n\n\n\n

So when you want to send 0.5 bitcoin to your friend, you can use a smartphone app, a bit like your personal banking, and the network is incentivised to agree that your balance has 0.5 deducted and your friend, 0.5 bitcoin added.<\/p>\n\n\n\n

Unlike national currencies, Bitcoin is a global money system, recognising no borders. It can be exchanged nearly instantly, at any time. There are no \u201cBitcoin banking hours\u201d and no KYC.<\/p>\n\n\n\n

But what about the principles of sound money, I hear you ask? Well Bitcoin has those covered too<\/p>\n\n\n\n