Why Bitcoin?

1. Limited Supply

In summary: the number of bitcoins that will ever be created is fixed and strictly limited. This number can never be increased. This limited supply is the main advantage of Bitcoin and the source of its value.

Bitcoin (abbreviated as BTC) was created by an anonymous creator using the pseudonym Satoshi Nakamoto in response to the financial crisis of 2007-2008, caused by excessive money supply and dishonest financial engineering. To prevent such crises and inflation leading to the devaluation of money, it was necessary to create a currency with a strictly defined, unchangeable, fixed, and certain supply. The number of bitcoins was rigidly defined (at 21 million units) in the algorithm (software) that governs the operation of the Bitcoin network.

New bitcoins are generated approximately every 10 minutes (as a reward for "miners" for approving the next entry in the ledger, called a block), but the number of newly created bitcoins decreases every 4 years in a process known as "halving." Initially, 50 bitcoins were created every 10 minutes, and now it's 6.25 BTC. In April or May 2024, the next "halving" will occur, and just over 3 bitcoins (3.125) will be created every ten minutes. Subsequent "halvings" will occur in 2028, 2032, 2036, and so on. By 2034, 99% of all "coins" will have been issued. For example, by 2060, only 0.006 BTC will be created every 10 minutes. The last coins will be issued around the year 2140. The exact schedule of future "halvings" and emission sizes can be found here: [link provided].

This supply is rigidly defined and unchangeable. It can never be altered. No one, neither an individual nor an institution, can "print" additional bitcoins or increase their quantity in the computer system (as is common with traditional currencies).

2. Small Quantity

In summary: the number of bitcoins is small, and most are already in circulation.

 The number of bitcoins is not only limited but also relatively small. The final quantity is 21 million (to be reached in 2140), of which over 19.5 million are already in circulation (the exact number can be found here: https://blockchain.info/q/totalbc. It is estimated that about 20-30% of bitcoins have been permanently lost (their owners have lost access to them).

Over the next 100 years, no more than about one and a half million bitcoins will be produced. As mentioned earlier, this number cannot be increased. Therefore, the supply of new coins (inflation) is constant and systematically decreasing (ultimately to zero). Meanwhile, demand, at least so far, is steadily increasing. Increasing demand and decreasing supply will have an obvious impact on the price.

3. Decentralization

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

To create a currency with a fixed supply, it was necessary to eliminate a "central institution" responsible for issuing money. Otherwise, the supply would not truly be fixed. Even if a "central institution" committed to limiting the supply, it would be a commitment that could be broken (as often happened with entities issuing traditional money). This is exactly what Satoshi Nakamoto wanted to avoid.

So, it was necessary to create a currency that would not be issued by a "central institution" (a bank or a state), i.e., a decentralized currency.

However, with decentralized currencies (attempts to create them were made earlier), a problem called "double spending" arose. In the case of decentralized currency, there is no central registry where the balances of individual accounts and transactions would be stored. In the case of traditional money, this data is recorded in a central registry maintained by a bank, for example. If a bank's customer wants to make a transfer, the bank confirms that Customer A has the funds and then transfers them to Customer B, updating the entries in the central registry.

Without a central institution, there is no central record of balances and transactions, including the problem of "double spending."

The creator of Bitcoin solved this problem with a distributed ledger and blockchain technology. In short, the ledger of account balances and transactions is not maintained by a single central institution (a bank or a state) but by many entities that have deployed appropriate software and joined the network. When Customer A wants to transfer Bitcoin to Customer B, they send a request to the relevant number of entities maintaining this ledger. If a sufficient number of entities confirm that Customer A has Bitcoin, the funds are "transferred," updating the records of Customer A and B. A new transaction is created in the blockchain, changing the balances of the two entities, and this new information about balances and transactions is sent to all entities maintaining the Bitcoin ledger.

Thus, entities maintaining the Bitcoin ledger verify transactions, store data on account balances, and transaction history.

Why do they do this?

The creator of Bitcoin provided them with rewards. As mentioned earlier, about every 10 minutes, the Bitcoin algorithm creates a specific number of new coins distributed to the entities maintaining the Bitcoin ledger (specifically, to the miner who validated the block). These rewards serve as motivation and an incentive to maintain the software that supports the Bitcoin network and the distributed ledger. The goal of those who maintain the decentralized Bitcoin ledger (the so-called miners) is to obtain (mine) new coins. The result is the security and maintenance of the Bitcoin network.

At the same time, mechanisms favor the most powerful computers (a miner with a more powerful computer has a greater chance of validating a block and, therefore, mining new coins). This leads to a kind of "arms race," and as a result, the Bitcoin network becomes increasingly robust. Currently, the Bitcoin network is supported by millions of computers with a combined computing power hundreds of thousands of times greater than the best supercomputer.

4. Security - Networks, Wallets, and Transactions

In summary: Bitcoin is the most secure network, with the most secure transactions and user wallets. Bitcoin's security has multiple layers.

Firstly, there's network security. As mentioned earlier, the Bitcoin network is the most powerful computer network in the world, constantly growing in strength. Immense computing power secures the network. The more computers participate in the network, the more computing power is consumed for "mining" Bitcoin (and, consequently, more energy is used), making the Bitcoin network stronger and more resistant to attacks (currently, a 51% attack is essentially impossible and certainly not worthwhile). The Bitcoin network has never been hacked (central exchanges trading Bitcoin have been hacked). Bitcoin software is open and transparent (open-source) and has been scrutinized by countless security experts and computer scientists. Additionally, miners, who maintain the network, are distributed worldwide, meaning there are no single points of failure or attack.

Secondly, there is user wallet security. When you create an account in the Bitcoin network, access to it is protected by a "private key," which is a string of 64 digits and characters or a so-called seed phrase consisting of 12 randomly chosen English words. Due to the number of combinations (340,282,366,920,938,463,463,374,607,431,768,211,456), there is no possibility of guessing, breaking, or hacking this protection. 

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

On the other hand, anyone with access to this data can access the BTC wallet, so it's crucial to protect it from others and from loss (in the event of loss, there is no way to recover it, and access to the bitcoins is permanently lost).

Thirdly, there is security resulting from decentralization and the absence of the need to trust anyone. Bitcoin operates in a decentralized network without a central governing body, CEO, intermediaries, or management. All data regarding each wallet is stored directly in the distributed Bitcoin ledger, which means on millions of computers. The integrity of this data is protected by the world's most powerful network. This means that unlike banks, brokers, exchanges, and other intermediaries, the Bitcoin network cannot collapse, disappear, or deceive. There are no individuals or entities to trust. Everything is based on a computer algorithm, not on trust in people.

This also means transaction security. Once a transaction is positively verified, it is final. It cannot be canceled or reversed. No one can freeze, stop, or block a valid transaction (no one, including law enforcement, courts, banks, etc.). If a transaction meets the network's requirements (primarily that the sender has the funds they are sending), it will be executed, and it is irreversible.

5. Portability

In summary: Bitcoin is easy and cheap to transport and send. 

Bitcoin has been an excellent store of value, and its value can be easily transported, regardless of its size. Whether you want to transfer a few dollars or a few billion, the transaction takes a few minutes, is not subject to any verification or censorship (other than confirmation on the network), cannot be stopped by third parties, and costs only a few dollars. Furthermore, you can access Bitcoin by having a 12-word phrase. These 12 words are enough to have access to your "money" anywhere in the world. You don't need a card, a phone, an ID, etc. So you can have all your Bitcoins (and their value) with you or written on a piece of paper or even just in your head.

6. How to Get Started

The easiest and safest way to acquire Bitcoin (and other cryptocurrencies) is on one of the "centralized exchanges," which act as intermediaries. A list can be found here. The largest exchange is Binance. Payment can be made by card or bank transfer.

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

When should you buy Bitcoin? If you consider BTC as a long-term investment and don't intend to trade or speculate with it, the classic saying applies: "The best time to buy Bitcoin was 10 years ago, the second-best time is now."

Everything I've written is not financial or investment advice. Whatever you do, you do at your own risk. However, it is true that no one who has bought Bitcoin and held it in an external wallet for at least 2-3 years (without losing the 12 words) has lost on that transaction. NO ONE, EVER!