I frequently explain that Bitcoin is a unique species of money. Fidelity, a global asset management giant, has just published a report explaining that Bitcoin is a better form of money. The firm went even further to say that Bitcoin is fundamentally different from cryptocurrencies and that it was highly unlikely that Bitcoin would 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 this for years now. Nevertheless, it is always interesting to see an asset management giant open its eyes to Bitcoin and share this view with leading investors who are bound to want to seize 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. Still, 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 deliberately provocative messages, because I know that these people don't expect real answers from me. They are simply looking for non-constructive criticism. And this is not something that interests me. I would much rather interact with people who are constructive and respectful, even if their opinions are different from mine.
Nevertheless, the publication of the Fidelity report made me want to respond to these people by explaining why Bitcoin is a unique species 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 that the Bitcoin system allows you to do these checks at any time. So you'll 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 Bitcoin supply is hard-capped at 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 to check it out for yourself in the Bitcoin source code that you can then run when you run your node on the network.
Here is what you will see in the Bitcoin source code:
You will notice here that MAX_MONEY is expressed in Satoshi which is the base unit in the Bitcoin Blockchain. Talking in Satoshi rather than BTC will become the standard in the future as the Bitcoin price increases sharply
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, he would be quickly noticed and then banned from the network by the other nodes. No one has any interest in changing this 21 million limit.
Since Bitcoin is a permissionless and trustless blockchain, you can choose to become a node on the network at any time. Using your full node is even highly recommended to take full power with Bitcoin. You can then check for yourself what the current supply of Bitcoin is. It stands at 18,947,787 BTC at the time of writing.
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 the automatic reduction of 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 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 mathematics.
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 deem necessary.
You can check how the Bitcoin system ensures controlled inflation of new BTC units
Another key feature of the Bitcoin protocol is the guarantee that each block of transactions will be issued on average every 10 minutes. With Bitcoin's Hash Rate constantly increasing over time, a mechanism had to be implemented within the protocol to prevent the issuance of new units from getting out of line with the issuance schedule planned by Satoshi Nakamoto when he designed Bitcoin.
This is where the adjustment to the difficulty of mining the next block on the Bitcoin network comes in. This adjustment is also written into the Bitcoin source code:
Every 2,016 blocks mined, an adjustment of the mining difficulty is made. This is unavoidable, and you can study for yourself the source code 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 are applied
After seeing these few snippets of Bitcoin's source code, you'll understand 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 contents 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 money species of its own. 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 that's where you have to realize that there are two things you benefit from with Bitcoin. First, its programmatic monetary policy that protects you from the ravages of monetary inflation. Generally, that's what attracts everyone to Bitcoin. Secondly, it is Bitcoin's decentralization with the protection against censorship that it gives you that 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.
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