Practically speaking, Bitcoin is a form of digital money that exists independently of any government, state, or financial institution, can be transferred globally without the need for a centralized intermediary, and has a known monetary policy that arguably cannot be altered. At a deeper level, Bitcoin can be described as a political, philosophical, and economic system. This is thanks to the combination of the technical features it integrates, the wide array of participants and stakeholders it involves, and the process for making changes to the protocol.

Bitcoin can refer to the Bitcoin software protocol as well as to the monetary unit, which goes by the ticker symbol BTC.

Launched anonymously in January 2009 to a niche group of technologists, Bitcoin is now a globally traded financial asset with daily settled volume measured in the tens of billions of dollars. Although its regulatory status varies by region and continues to evolve, Bitcoin is most commonly regulated as either a currency or a commodity, and is legal to use (with varying levels of restrictions) in all major economies. In June 2021, El Salvador became the first country to mandate Bitcoin as legal tender.

The paper detailed methods for "allowing any two willing parties to transact directly with each other without the need for a trusted third party." The technologies deployed solved the 'double spend' problem, enabling scarcity in the digital environment for the first time.

The listed author of the paper is Satoshi Nakamoto, a presumed pseudonym for a person or group whose true identity remains a mystery. Nakamoto released the first open-source Bitcoin software client on January 9th, 2009, and anyone who installed the client could begin using Bitcoin.

Initial growth of the Bitcoin network was driven primarily by its utility as a novel method for transacting value in the digital world. Early proponents were, by and large, 'cypherpunks' - individuals who advocated the use of strong cryptography and privacy-enhancing technologies as a route to social and political change. However, speculation as to the future value of Bitcoin soon became a significant driver of adoption.

The price of bitcoin and the number of Bitcoin users rose in waves over the following decade. As regulators in major economies provided clarity on the legality of Bitcoin and other cryptocurrencies, a large number of Bitcoin exchanges established banking connections, making it easy to convert local currency to and from bitcoin. Other businesses established robust custodial services, making it easier for institutional investors to gain exposure to the asset as a growing number of high-profile investors signaled their interest.

WHAT IS BITCOIN USED FOR?

At its most basic level, Bitcoin is useful for transacting value outside of the traditional financial system. People use Bitcoin to, for example, make international payments that are settled faster, more securely, and at lower transactional fees than through legacy settlement methods such as the SWIFT or ACH networks.

In the early years, when network adoption was sparse, Bitcoin could be used to settle even small-value transactions, and do so competitively with payment networks like Visa and Mastercard (which, in fact, settle transactions long after point of sale). However, as Bitcoin became more widely used, scaling issues made it less competitive as a medium of exchange for small-value items. In short, it became prohibitively expensive to settle small-value transactions due to limited throughput on the ledger and the lack of availability of second-layer solutions. This supported the narrative that Bitcoin's primary value is less as a payment network and more as an alternative to gold, or 'digital gold.'

Here, the argument is that Bitcoin derives value from a combination of the technological breakthroughs it integrates, its capped supply with 'built-into-the-code' monetary policy, and its powerful network effects. In this regard, the investment thesis is that Bitcoin could replace gold and potentially become a form of 'pristine collateral' for the global economy.

Another popular narrative is that Bitcoin supports economic freedom. It is said to do this by providing, on an opt-in basis, an alternative form of money that integrates strong protection against (1) monetary confiscation, (2) censorship, and (3) devaluation through uncapped inflation. Note that this narrative is not mutually exclusive from the 'digital gold' narrative.

ROLES OF BITCOIN IN CAMBRIDGETRADES

The currency works worldwide.

There are a lot of benefits to an international currency, and it’s especially helpful if your business exports services and goods or purchases materials from other countries. Bitcoin and other cryptocurrencies help you avoid the expensive foreign transaction fees or exchange rates.

1. BITCOIN IS PERMISSIONLESS

Traditional currencies and forms of money require permission to use (from banks, financial institutions, governments). Bitcoin requires no permission from anyone and is free and open to use globally. There are no borders or limits with Bitcoin opening CAMBRIDGETRADES to lots of positive possibilities.

2. BITCOIN IS FAST AND EASY TO USE

Since Bitcoin is a digital peer-to-peer currency as outlined in the original Satoshi Nakamoto whitepaper, transactions are near-instant. They’re very low-cost too, much less than central payment networks such as PayPal, Visa or Mastercard.

3. BITCOIN PROVIDES ANONYMITY

If used correctly, Bitcoin can be used as an anonymous currency free from spying governments and preventing their interference in the properties and data of CAMBRIDGETRADES customers. When you use Bitcoin, you don't need to provide your email, name, social security number, or any other identifying information when making peer-to-peer Bitcoin transactions. If not used correctly though, Bitcoin can just be pseudo-anonymous providing people with a lot more privacy than using traditional currencies.

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