Bitcoin is in the news, usually with some startling information about some guy tossing out his old computer for recycling with his only bitcoin wallet on the hard drive. His old wallet has the only access to hundreds of thousands of dollars’ worth of bitcoin. And it’s gone. Or you read the predictions about the bitcoin that was worth 39 cents in 2010 and $500 in 2016 skyrocketing to $100,000 by the end of 2018. Online stories about the unregulated aspect of digital currency open up scenarios […]

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In November 2008, Satoshi Nakamoto published a white paper that began “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments.” The solution, as Nakamoto saw it, was an electronic cash system “based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” The 8-page white paper then went on to explain the electronic payment system that could serve this […]

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Built into the bitcoin protocol from the beginning was a limit to the number of coins that will ever be created. The limit is 21 million. Technically, the limit is 20999999.9769, short of 21 million by 3 bitcents. Without a limit to the possible number of bitcoins, they would become like fiat money and decrease in value as more and more and more bitcoins were created. With a limit on it, bitcoin should increase in value. Bitcoin creation begins with a transaction. The transaction synchronizes with the […]

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