Bitcoin

<p>Over the past few years, there have been countless anticipated  blockchain projects that withered and died when faced with a crisis.   Whether it be due to regulatory oversight, hacks, poor design, or  something else entirely, very few have become actual mainstays.   Throughout it all, there has been one constant within the sector that  has proven to have unmatched resilience that will continue to allow for  it to endure near any crisis – Bitcoin (BTC).</p><p>Looking forward,  investment firms like ARK Invest continue to view Bitcoin as having  massive potential.  Citing the strong fundamentals of its network, ARK  Invest believes that, <em>“the price of bitcoin could exceed $1 million in the next decade”</em>.  Below, we look at and build upon a few of Bitcoins ‘value propositions’ noted in ARK Invest’s ‘<a href="https://ark-invest.com/big-ideas-2023/" rel="noopener noreferrer nofollow">Big Ideas 2023</a>‘.</p><h2 id="header-0">Industry Investments</h2><p>Before  diving in to exactly what fundamentals underpin the Bitcoin network,  here are a few publicly traded companies taking part in the sector,  furthering and fostering network growth.  These are not recommendations,  but rather examples of publicly traded companies closely associated  with digital assets like Bitcoin.</p><h3 id="a-href-https-www-microstrategy-com-en-rel-noopener-noreferrer-nofollow-microstrategy-a-a-href-https-www-nasdaq-com-market-activity-stocks-mstr-rel-noopener-noreferrer-nofollow-mstr-a"><a href="https://www.microstrategy.com/en" rel="noopener noreferrer nofollow">MicroStrategy</a> (<a href="https://www.nasdaq.com/market-activity/stocks/mstr" rel="noopener noreferrer nofollow">MSTR</a>)</h3><p>At  this point, MicroStrategy stock is essentially a proxy for investing in  Bitcoin (BTC) itself.  For multiple years now, MicroStrategy has  rapidly been accumulating BTC for holding in its treasury, as the  company believes it is the ultimate hedge, and the currency of tomorrow.</p><p>Aside  from its operations as a software and analytics company, MicroStrategy  has now embarked on various initiatives meant to further development of  Bitcoin scaling solutions like the Lightning Network.</p><p>In 2022, MicroStrategy boasted a revenue of nearly $500M.</p><h3 id="a-href-https-www-coinbase-com-rel-noopener-noreferrer-nofollow-coinbase-a-a-href-https-www-nasdaq-com-market-activity-stocks-coin-real-time-rel-noopener-noreferrer-nofollow-coin-a"><a href="https://www.coinbase.com/" rel="noopener noreferrer nofollow">Coinbase</a> (<a href="https://www.nasdaq.com/market-activity/stocks/coin/real-time" rel="noopener noreferrer nofollow">COIN</a>)</h3><p>Since  its launch in 2012, Coinbase has been a fixture in the digital asset  sector.  Not only is it one of the most recognizable names, it has acted  as an onramp for beginner enthusiasts looking to gain exposure to  assets like Bitcoin.</p><p>Now, Coinbase is one of the most trusted  exchanges of its kind, as it is both publicly traded and regulated.  In  2023, notable investment funds like ARK Invest have been loading up on  ‘COIN’, with the belief that it will not only survive, but thrive well  in to the future.</p><p>In 2021, during the peak of the bull market, Coinbase boasted a revenue of $7.84B.</p><h3 id="a-href-https-riotplatforms-com-rel-noopener-noreferrer-nofollow-riot-platforms-a-a-href-https-www-nasdaq-com-market-activity-stocks-riot-real-time-rel-noopener-noreferrer-nofollow-riot-a"><a href="https://riotplatforms.com/" rel="noopener noreferrer nofollow">Riot Platforms</a> (<a href="https://www.nasdaq.com/market-activity/stocks/riot/real-time" rel="noopener noreferrer nofollow">RIOT</a>)</h3><p>Operating  out of Colorado, Riot Platforms is one of the more successful names in  the Proof-of-Work (PoW) mining sector.  As such, it plays an important  role in securing the Bitcoin network by adding to its cumulative  hashrate.  Like MSTR, investing in RIOT can be likened to investing in  BTC via proxy.</p><p>In 2021, Riot Platforms boasted a revenue of nearly $215M.  At time of writing, <a href="https://www.barrons.com/market-data/stocks/riot?mod&#61;searchresults_companyquotes&amp;mod&#61;searchbar" rel="noopener noreferrer nofollow">various analysts list</a> RIOT as a ‘BUY’</p><h2 id="header-1">Bitcoin Fundamentals</h2><p>So  what is it about Bitcoin in particular that has allowed for it to  retain its spot atop the digital asset sector since inception?  While  examples of early adopters striking it rich, and use cases like its  place in the remittance industry may have helped with its adoption, it  is the fundamental structuring of the project that has allowed it to  persist and thrive.  The following are a few examples of this, and why  they are important.</p><h3 id="initial-distribution">Initial Distribution</h3><p>From the moment the Bitcoin network went live, the full 21M BTC was on tap for anyone looking to become a miner.  There was <a href="https://coinmarketcap.com/alexandria/glossary/pre-mine" rel="noopener noreferrer nofollow">no pre-mine</a>,  with network developers keeping a portion of BTC for themselves.  In  addition to this, miners were given months notice by Satoshi Nakamoto of  when the network would go live.</p><p>It is important to recognize that  at the time, digital assets were essentially an unknown.  With this  being the case, no one was rushing to buy BTC.  No one was struck with a  case of ‘FOMO’.  This meant that Bitcoin grew slowly and naturally –  something that allowed for it to attain high levels of decentralization,  as very few were accumulating an asset in large quantities that was not  worth much of anything at the time.  It was only over the course of  years, and through the use of incentives like ‘faucets’, that Bitcoin  eventually established a foundation of users large enough to ensure  network security, use cases, and continued organic growth.</p><p>In the  present day, hype and interest in the sector simply does not allow for  the launch of Bitcoin to be recreated.  Even if someone where to attempt  replicating it, which can easily be done with its open-source code,  what would incentivize users to use it?  The new network would not be  decentralized, it would not be secure, and it would not be able to grow  naturally while fortifying its foundation.</p><h3 id="security">Security</h3><p>Speaking  of security, this is one of the main fundamentals that makes the  Bitcoin network so resilient.  By leveraging decentralization and  blockchain technology, Bitcoin removes the need for trust and reliance  on third parties to facilitate transactions.  The less parties involved  in a transaction, the less chance of something going wrong.</p><p>It  also means that transactions are simultaneously broadcast to nodes  around the globe, only to be recorded on the network ledger for all to  see.  If one node were to go down, there are scores of others that just  keep on working.</p><p>Due to how expansive the Bitcoin has now become, for a bad-actor to  try and manipulate the network, only a massive coordinated attack  costing billions has a chance at working.  This means accumulating  enough hash-power to account for at least 51% of the network – something  which may sound simple, but would be insanely cost prohibitive and  unlikely to have any lasting effect.</p><h3 id="accessibility">Accessibility</h3><p>As  corrupt, inefficient, and predatory as modern banking services can be,  they are still a luxury that many do not have access to.  Bitcoin  however, functions on a global scale, and is accessible to anyone,  anywhere.  With increasing <a href="https://www.securities.io/global-connectivity-a-reality-through-reusable-rocket-deployed-satellites/" rel="noopener noreferrer nofollow">global connectivity</a>, this means that Bitcoin is able to offer a level of financial inclusion not seen before.</p><p>Its accessibility goes beyond who can leverage the network, and expands to when they can.  Since its inception, the Bitcoin network has remained fully  operational for 99.99% of the time.  It does not shut down for the  weekend, or limit its services after 5pm.  If a user needs to make a  transaction on the network, Bitcoin remains functional anywhere, and at  anytime for users to rely upon.</p><h3 id="consensus-mechanism">Consensus Mechanism</h3><p>The  mechanism through which Bitcoin processes and validates transactions is  known as ‘Proof-of-Work’.  Simplified, this involves network miners  competing, by solving complex mathematical equations, in a lottery for  BTC which is released every 10 minutes.  While random, the odds of  receiving this block reward increases alongside the computational  ability of the mining units.  While PoW may get flack over energy usage,  it has allowed for the creation of one of the worlds most robust and  trusted networks than transcends borders.  Many perceive the power used  to mine Bitcoin as providing an additional intangible ‘backing’ to BTC,  viewing it as monetized energy.</p><p>Beyond providing the network with a  fair and robust means of a consensus, PoW on the Bitcoin network is  quite flexible, readjusting itself to match market conditions  automatically.  The more miners participating, the harder the difficulty  becomes, and vice versa.</p><h3 id="technical-metrics">Technical Metrics</h3><p>From  a more technical standpoint, there are various metrics which give  context to the underpinnings of the Bitcoin network.  Each of which  point to a bright future.</p><p></p><img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/81ae8c0a128943b185a9c51318e8bd64.jpg" /><p>In its paper ‘Big Ideas 2023’, ARK Invest notes that despite most  recently weathering a turbulent 2022, Bitcoin is boasting all time highs  in hashrate, Lightning network capacity, and various other metrics.  No  doubt, these and various others, influencing its lofty price forecasts  for the coming decade.</p><h3 id="ideology">Ideology</h3><p>Finally,  one of the most important fundamentals of the Bitcoin network that has  allowed it to thrive, is the set of ideologies on which it is based.  By  utilizing blockchain technology, Bitcoin is able to boast complete  transparency, and immutability.  Each of these traits also allow for the  the network to be easily audited.</p><p>Furthermore, Bitcoin has a  fixed supply with a known issuance rate, that is free of any controlling  body.  While not perfect, it is the only offering that works on a  global scale, putting all participants on equal footing.</p><p>It is  this group of ideologies that spurred early adopters in to action, and  for them to nurture the network when it needed it most.  An autonomous  and decentralized medium for value transfer that removes the need for  trust, and boasts a fixed supply.</p><p>To this day, much of the  adoption experienced by the network is not by people looking to strike  it rich, but to take part in a safer, fairer, system that brings the  entire world closer.</p><h2 id="header-2">Final Word</h2><p>When considering each of  the above points as a whole, it is clear that Bitcoin is a fortunate  anomaly.  It shouldn’t have survived its early days, but on the backs of  a forward thinking few, it did.  Now, the Bitcoin network has  essentially snowballed in growth, to the point that it cannot be  stopped.</p><p>Sure, Bitcoin has had hiccups, and still has issues which  need addressed – but it would be folly to overlook the fundamentals  that got it to where it is today, and not recognize that they are what  will allow for it to endure near any crisis.</p><p>Bitcoin is fair,  secure, accessible, adaptable, and well intentioned.  Combined, these  have created one of the most robust and revolutionary financial mediums  known to date.</p><p></p>

Bitcoin Fundamentals Will Allow it to Endure Near Any Crisis

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Andre artikler udgivet 14. feb. 2023

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