What is Bitcoin: The Basics

What is Bitcoin?

Bitcoin is a digital peer-to-peer electronic cash system, i.e. it brings the features of cash money into the digital world.

Bitcoin is money that everyone can use to make daily transactions (e.g. to buy food at a local warung or to buy goods online at tokopedia) and
store value (e.g. to save money for the future).

One distinguishes between Bitcoin (the overarching concept and network) and bitcoin (the currency).

Bitcoin is the first and only decentralized currency that allows people to transfer value and make payments online in a secure way without the need of third-party intermediaries, such as banks and credit agencies.

Bitcoin uses a blockchain as a public ledger of all transactions and the proof-of-work algorithm to secure the network.

Bitcoin was invented in 2008, however, it is the result of over 40 years of computer science research and development.

prehistory of bitcoin by gigi and dan held

Bitcoin runs consistently for more than 10 years without any interruption. Bitcoin’s uptime of 99.98% is …

higher than Facebook’s,
higher than Google’s,
higher than the US government’s, and
higher than the Indonesian government’s uptime.

Bitcoin is the most secure network in the world

The first wonderful thing about Bitcoin is that it is so diverse and profound. It combines many different areas of our live and there is so much to explore and learn in each of these areas. In short, to understand Bitcoin to the last detail, you need to learn a lot.

The second wonderful thing about Bitcoin is that it is so easy everyone can use it. You do not need very much knowledge or skills to use Bitcoin. Thanks to the many applications that have already been developed, it is very straightforward and intuitive (see the guide below)

Bitcoin Indonesia book by Bitcoin indonesia. What is bitcoin?

Solid Monetary System

Bitcoin is per definition the best money in human history. Here is why: Compared to fiat money or gold, Bitcoin excels in almost all qualities of money.

Durability: Bitcoin comes in digital form and cannot degrade over time unlike physical objects, paper notes, and coins.

Portability: Bitcoin can be transferred from one place to another at the speed of light as it is purely digital, has no weight, takes up no physical space, and does not have to take detours through intermediaries.

Divisibility: 1 bitcoin can be divided into 100.000.000 satoshis (like 1 US Dollar equals 100 Cents), which makes it easy to use even for micro-transactions.

Fungibility: Every bitcoin is the same. There is no difference in quality, size, or value.

Scarcity: Bitcoin has a fixed supply of 21 million bitcoins, thus, it is protected from inflation and becomes more valuable over time (unlike the fiat system – see page 26).

Acceptability: Bitcoin is already widely accepted to pay for goods and services and is recognized as a (future) global currency.

Security: Bitcoin uses advanced cryptography to secure transactions and prevent fraud and counterfeiting

solid monetary system bitcoin indonesia. Gold vis bitcoin vs fiat money

In addition to its high quality, there are benefits like:

Decentralization: Bitcoin is not controlled by any government, financial institution, or any other single party. This makes it less subject to manipulation or interference.

Open network: Bitcoin is open, permissionless, and global. It works the same everywhere and is for everybody, thus, it improves financial inclusivity.

Speed and efficiency: Bitcoin transactions are generally faster than traditional financial transactions and they can be processed 24/7. A settlement happens within seconds while it can take months to settle a fiat transaction.

(Almost) zero fees: Bitcoin transactions have much lower fees than traditional financial institutions, which is beneficial for users who make frequent, small, or large transactions.