You’re familiar with using PayPal or your online bank to send, receive and manage your “money” on the internet. Although convenient, there’s some problems:
- You need permission to have an account with PayPal or a bank. They have the power to close your account, block your transfers, and ask questions about your transactions. In short, they stand between you and the free use of your money.
- If you want to send money to a friend in Canada or France, a conversion has to happen between your form of money, the US Dollar, and theirs. PayPal and banks charge a fee for this conversion.
- Your money loses value over time, as the government continually enlarges the money supply through inflation. A dollar today is worth 90% less than one in 1920.
Bitcoin is the internet’s native form of money, and solves these problems.
- It’s permissionless. Just like email, anyone can access and use it, but nobody owns or controls it. Nobody can stop you from owning and using bitcoin.
- It’s global. Bitcoin is a worldwide currency. Just like email, you can send bitcoin as fast and freely to someone in Japan, as to your neighbor next door.
- It has a limited supply. By design, there will never be more than 21 million bitcoins.
Let’s now explore how Bitcoin works. →