On the website there is a series of daily articles in which we develop the start of Bitcoin into a total story that everyone can understand.
Earlier you could read about Satoshi Nakamoto and the history surrounding the cypherpunks. Then we dived into the history of economic thought and the Austrian School. Yesterday, the life course of Bitcoin was discussed as a protocol.
In today's article we dive into another basic theme: digital scarcity.
Digital scarcity
Bitcoin is unique in this respect. It's a protocol that solves the double spending problem. To understand this, we need to take a step in the right.
If you're writing out a .worddocument and sending it to someone over the Internet, send a copy of it. As a result, you duplicate the file and have the same data twice. The same is true with sending a photo via Whatsapp: you always send a copy of the original.
By sending money, you don't want this. Money must not be duplicated. That's where the term double spending comes from. We have explained this problem once before using digital and physical apples.
If you have a physical five euro note in your hand, you can just give it to someone. You don't need anyone but the receiver. And there's no need for an intermediary.
But as soon as you want to cross/give these five euros in digital form, you always had to consult a third party who keeps the balance. And because of this necessity, commercials have been given a hugely important role in our current financial system. Even such a big role, they're too big too fail.
Bitcoin solves this problem. With Bitcoin you can send data (or better yet: value) without an intermediary and without duplications. Duplicating a private key makes no sense. Bitcoin is the first digital scarce asset.
21 million
You could also look at the scarcity from a different angle. After all, the euro is not in short supply. The gold standard was finally released in 1971 and since then it has been a matter of (a digital) brrrrrr, so as not to make money.
Money, especially with the digital character it has today, is more printable than ever before. This was also evident at the start of the corona crisis, in which the balance sheets of these centrally regulated banks increased.
Bitcoin is scarce money. It is scarce because it has been thought in advance how many coins are going into circulation and when this is happening roughly. Namely: with each block, on average every 10 minutes. And this is (expected) to continue until the year 2140.
A total of 21 million BTC will enter circulation. That's 210000000000000000000000000. These sats cannot be duplicated and this number cannot be influenced by a central party. It is perhaps the most important aspect that Bitcoin accomplishes: it is money that is both digital, and not duplicate and decentralized.