Bitcoin, Central Bank Digital Currencies, and the Future of Money
Decrypting the most powerful trends in crypto
Bitcoin is the monetary base of the Internet. Unlike national currencies, new bitcoins are created by a fixed and finite supply.¹ In an era of unprecedented monetary expansion Bitcoin’s value proposition is unique. There will only be 21 million bitcoins amid increasing trillions of dollars, pesos, yuans, etc.
Instead of relying on central bankers to determine money supply, Bitcoin is decentralized. Global miners timestamp blocks of transactions² that are verified by a global network of nodes³ for a protocol maintained by hundreds of developers⁴ worldwide. Bitcoin’s first block was mined with the following cryptographic message in 2009:
“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”⁵
Global central banks have embraced increasingly unconventional methods since 2009. In May 2020, after a decade of sound Bitcoin monetary policy, miners etched a similar headline in digital eternum:
