For centuries, Bitcoin has been the price of riches, and wealth was measured in Gold.
Gold was everything when things was all mechanic and analog. Then we went digital and then came Bitcoins.
Wealth has moved unto the digital landscape.
Gold is a precious metal, but what is the digital version of Gold? The digital version of Gold would have to share most of the characteristics of Gold: be a medium of exchange, scares, counterfeit-proof and indestructible.
What is Bitcoins?
Bitcoin is the first online decentralized currency. Bitcoin allows for near instant anonymous trnasaction among among peers.
History of Bitcoins
In October 2008 the concept of Bitcoin, a decentralized peer-to-peer monetary system was introduced in an emailing list by an unknown entity under the name of: Satoshi Nakamoto.
In January 2009, Satoshi Nakamoto released the open source Bitcoin software to the public.
The concept of decentralized peer-to-peer monetary system that could not be controlled or monitored by the government appealed to anarchist and other sharing economy. Slowly the adoption of Bitcoins continued.
[See the origial article: Recap of Bitcoins]
Like Gold, Bitcoin is also mined – digitally.
Every second, transactions happen on the Bitcoin blockchain and these transactions must be verified by all machines on the network and appended into a new block.
Multitudes of these decentralized blocks are called the blockchain. Mining Bitcoin is the process of verifying that these Bitcoin transactions are accurate so they can be appended into a blockchain. New blocks are created approximately every 10 minutes.
Bitcoin is the crypto token released as reward when miners verify new blocks. Bitcoins are rewarded at a rate of 25 new Bitcoins for every new block created. But the reward is cut down into half ever four years.
As at now only 12.5 new Bitcoins are rewarded for every new block until mid 2020 when there will be another halving to 6.25 new Bitcoins for each block.
This halving continues for every four years until the full 21 million Bitcoins has been created somewhere in the year 2140. Each Bitcoin can be dividend into 100m bits, and each bit is identifiable and programmable.
Bitcoin is built on a distributed archive of blocks of all transactions that every happen on the network. Multiple transactions are grouped into blocks and every computer on the network has a copy of these blocks of transactions. The information in these blocks is open and accessible to all. This way everyone can tell what belong to who and who is doing what, at any given moment.
This record that Bitcoin miners keep of the all transactions in the network is known as the blockchain. The blockchain is a decentralized network of ledgers that all have the same records and agree to the validity of every new block created.
Value of Bitcoin
The value of Bitcoins is not in the crypto currency Bitcoin itself. Instead its in the technology and industry created by Bitcoins.
The technology of Bitcoins has ushered us into an age of trust-less, decentralized and autonomous system while the industry created by Bitcoins has unleashed an trillion dollar industry which could power the Internet of Things.
This new industries created by Bitcoins and Blockchain has seen massive interest and investments becoming termed the Block Rush.
Bitcoins and Gold have enough similarities: they are both mined, they come in fine quantities, they cannot be counterfeited, they are precious, are a medium of exchange and come with an industry worth billions.
It was not coincidence that Bitcoin founder Satoshi Nakamoto in the White paper of Bitcoins likened Bitcoin miners to Gold miners. Bitcoin is the Gold of the digital age.
The term Bit Gold is used as a neologized metaphor to symbolize the similarities of Gold and Bitcoins. If Bitcoin is the digital gold, then we might as well refer to Bitcoins as: Bit Gold.