I often explain that Bitcoin is a unique type of money. Fidelity, a global asset management giant, just published a report explaining that Bitcoin is a better form of money. The firm went further to say that Bitcoin is fundamentally different from cryptocurrencies and that it is highly unlikely that Bitcoin will ever be replaced as the leader in this sector.
What Fidelity says in its report is not a revelation to me as I have been writing about it for years. Regardless, it's always interesting to see an asset management giant open its eyes to Bitcoin and share this view with leading investors who are bound to take advantage of the Bitcoin opportunity in the coming months.
It reminded me of the many provocative messages I can receive day after day. Some people attack bitcoin head on and then ask me to prove them wrong. Others tell me that there is no evidence that Bitcoin's programmatic monetary policy does what it claims to do. However, others tell me that the supply of Bitcoin is not limited to 21 million units.
I usually don't take the time to respond to these intentionally provocative messages because I know these people don't expect real answers from me. They are just looking for non-constructive criticism. And that's not something I care about. I would prefer to communicate with people who are constructive and respectful, even if their opinions differ from mine.
Regardless, the publication of the Fidelity report made me want to respond to these people by explaining why Bitcoin is a unique type of money. You've probably heard the following meme in the Bitcoin world: “ Do the math, run the numbers ".
The reason this meme has become so popular is because the Bitcoin system allows you to do these checks at any time. So you will see very quickly how Bitcoin is the opposite of the current monetary and financial system. For the better, of course.
You can see for yourself that the supply of Bitcoin is limited to 21 million units
Let's start with the Bitcoin supply limit of 21 million units no matter what. I'm not asking you to take my word for it, but rather check it out for yourself in the Bitcoin source code, which you can then run when you start your node on the network.
Here's what you'll see in the Bitcoin source code:
Here you will notice that MAX_MONEY is expressed in satoshis, which is the basic unit in the Bitcoin Blockchain. Speaking in satoshis instead of BTC will become the standard in the future as the price of Bitcoin skyrockets .
All nodes in the Bitcoin network run this source code. So there is a consensus on this maximum Bitcoin supply set at 21 million. If someone were to modify the Bitcoin source code to change this constant, they would quickly be noticed and then banned from the network by the other nodes. No one is interested in changing this 21 million limit.
Since Bitcoin is a permissionless and trustless blockchain, you can choose to become a node in the network at any time. Using your full node is even highly recommended to get the full power with Bitcoin. You can then check for yourself what the current Bitcoin supply is. At the time of writing, it stands at 18,947,787 BTC.
You can see for yourself that the issuance of new BTC units is reduced every 210,000 blocks added to the Bitcoin Blockchain
Now let's move on to automatically reducing the issuance of new BTC units over time. I don't expect you to take my word for it. Again, you can go to the Bitcoin source code to see what happens at the time of the halving:
This halving is automatic and no one can stop it. This is where the superiority of Bitcoin's programmatic monetary policy has its roots. It is inevitable that the issuance of new BTC units will reach zero by 2140. It is a matter of math.
The opposite is true in the current system, where a minority of people who are not representative of the people can print as many units of fiat currency out of thin air as they see fit.
You can check out how the Bitcoin system provides a controlled inflation of new BTC units
Another key feature of the Bitcoin protocol is the guarantee that each block of transactions will be issued every 10 minutes on average. As Bitcoin's hashrate has steadily increased over time, a mechanism had to be implemented in the protocol to prevent new units from being released in accordance with the release schedule planned by Satoshi Nakamoto when he designed Bitcoin.
Here comes the adjustment to the difficulty of mining the next block in the Bitcoin network. This fix is also written into the Bitcoin source code:
Every 2016 blocks mined, a mining difficulty adjustment is made. This is inevitable, and you can examine the source code yourself that performs the calculation of the new mining difficulty:
After checking the Bitcoin source code, you can run your own node to make sure these rules apply
Once you see these few snippets of the Bitcoin source code, you will realize that Bitcoin is an open book that anyone can read. This is true for its source code, which you will execute by becoming a node on the network, but it is also true for the content of the Bitcoin blockchain, which is stored by every node on the network in identical form.
So at any time you can do the math by applying the various parameters used by the Bitcoin protocol that you can see in its source code and then run the numbers with your own node.
Bitcoin is a separate form of money. This is especially true when you add to its superior programmatic monetary policy the fact that Bitcoin cannot be censored as long as you have the private keys associated with your BTC units.
And this is where you have to realize that there are two things that you benefit from with Bitcoin. First, its programmatic monetary policy that protects you from the ravages of monetary inflation. Overall, this attracts everyone to Bitcoin. Second, it's the decentralization of bitcoin with the anti-censorship protection it gives you, which you should use to your advantage.
By combining these two elements, you will be able to take full advantage of the liberating power of the Bitcoin revolution.