You Asked About Bitcoin

Recently, a friend asked me what I know about Bitcoin. It's a question I’ve been getting for years, and I’m sure it won’t be the last time. Below, I share some high-level feedback that I provided. While it's not an exhaustive dive into the world of cryptocurrencies, it does give you a solid overview of Bitcoin from my perspective.

First off, I’m not embarrassed to say that I am NOT a fan of cryptocurrencies. (I’ll elaborate on that in future posts.) However, I am a HUGE fan of the technology and innovation behind Bitcoin and other cryptocurrencies! These developments have expanded how, when, and where cryptography can be used, and they hold significant potential for future applications.

As we look ahead to 2024 and beyond, I suspect that the ideas sparked by Bitcoin and blockchain technology will give rise to even better innovations that could transform various industries. In that sense, I AM a fan of Bitcoin as a concept, especially in how it encourages us to explore new possibilities in tech and finance. Without further ado, here are my updated thoughts on Bitcoin:

What is a currency?

• Currencies are simply a “medium of exchange.” Over time, there have been many forms of currency (think dollar, Euro, etc.). Their value depends largely on confidence—such as the trust we place in "the full faith and credit of the U.S. government."

How and why did Bitcoin come into existence?

• Bitcoin originated from a desire to move away from government influence over currency and financial systems. Many didn’t like how governments handled things, such as printing more money to prop up struggling economies. Bitcoin was a response to that, aiming to be a decentralized alternative.
• One of the unique aspects of Bitcoin is that only a FINITE number of bitcoins will ever be “mined.” A new bitcoin is created when someone solves a complex mathematical problem—a process known as “mining.” The solver is awarded Bitcoin for successfully solving the problem.

Will Bitcoin be around for the long haul?

• The question of Bitcoin’s long-term viability is still up in the air. While Bitcoin remains the dominant cryptocurrency, new challengers have entered the market with their own improvements and features. Bitcoin has the advantage of being the first, but that doesn’t guarantee it will "win" in the long term.
• That being said, institutional support from high-profile figures (such as Elon Musk) and investment firms has certainly helped keep Bitcoin in the spotlight. However, with regulations tightening and other cryptocurrencies gaining traction, the future is uncertain.

What about cryptography and the blockchain?

• Bitcoin is underpinned by a powerful set of technologies—most notably, blockchain. Blockchain technology, closely tied to cryptography, is already transforming back-office processes in many industries, from finance to healthcare.
• Blockchain technology is a great growth opportunity and I do think will be present (in current or future generations of its form) for a long, long time.

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