Bitcoin for Beginners
Dec 27, 2023
Bitcoin is the first, most well-known, and highest capitalized cryptocurrency! That's saying something.
It was created in 2009 by someone named Satoshi Nakamoto, about whom we know nothing despite numerous investigations and more or less fanciful claims, mystery.
This creation followed a major financial crisis in 2008, where the banking system almost collapsed and central banks had to intervene and create money.
Bitcoin was created to address two problems:
Commercial banks taking reckless risks and exposing their clients to them
Central banks printing money and devaluing the currency in proportion
Bitcoin was designed to be used for transactions:
Peer-to-peer without the need for intermediaries such as banks, addressing the first issue
The number of Bitcoins is limited to 21 million, there will never be more, which prohibits central banks from printing money
Bitcoin aims to become a currency. To be a currency, it must:
Be a store of value
Be a medium of exchange
Be a unit of account
Bitcoin has experienced both tremendous success and numerous criticisms.
Success because it has been adopted by a large number of users and the value of all Bitcoins ($800 billion in December 2023) is proof of that.
It has also faced many criticisms, sometimes justified when malicious actors used it for illicit activities.
Often, there are biased criticisms because Bitcoin, by addressing the topic of currency, has scared central banks, commercial banks, and authorities who fear for their sovereignty. These criticisms are sometimes echoed by media outlets that lack perspective.
Today, 14 years after its creation, and despite all the attacks it has faced, Bitcoin is stronger than ever. To the point that institutions have changed their attitude, with the largest fund managers wanting to launch financial products based on Bitcoin, Bitcoin ETFs that will be possible to purchase in one's securities account from their broker.
Obviously, these financial products contradict the foundations of Bitcoin, which aims to eliminate financial intermediaries, and pose new challenges for it.
Regardless, we believe that one should hold Bitcoin as a diversification tool in their portfolio, just like gold, bonds, real estate, or stocks.