Assets, Bitcoin

Is Bitcoin a Liquid?

Bitcoin is often described as a digital or virtual currency that is not backed by any government or central bank. Bitcoin is a decentralized peer-to-peer payment network powered by its users with no central authority or middlemen.

From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Bitcoin is the first implementation of a concept called “cryptocurrency”, which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto.

Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin.

NOTE: WARNING: Investing in Bitcoin may not be as liquid as other investments. It is important to research and understand the risks associated with investing in Bitcoin before making any decisions. Additionally, it is important to understand that the value of Bitcoin can be highly volatile and subject to extreme fluctuations in price.

Bitcoin is unique in that there are a finite number of them: 21 million. Satoshi Nakamoto, bitcoin’s enigmatic founder, arrived at that number by assuming people would discover, or “mine,” a set number of blocks of transactions daily. Every four years, the number of bitcoins released relative to the previous cycle gets cut in half, as does the reward to miners for discovering new blocks. (The reward right now is 12.

5 bitcoins.) As a result, the number of bitcoins in circulation will approach 21 million, but never hit it.

So is Bitcoin liquid? In short, yes. While there are only 21 million bitcoins that will ever be created, each bitcoin can be divided into 100 million satoshis.

So while there may not be enough bitcoin to go around for everyone to own one whole bitcoin, there will definitely be enough to allow everyone to own some fraction of one.

Previous ArticleNext Article