The Bitcoin Ecosystem
To kick off your education, Cryptocurrencies like Bitcoin are pre-programmed to create a set amount of coins. Once this limit is reached, no new coins will be created. This creates scarcity. For instance, the algorithm that governs Bitcoin will create no more than 21 million Bitcoins.
Think about this… There are 35 million millionaires in the world. That means if every millionaire wanted to own an entire Bitcoin, they wouldn’t be able to.
There literally is not enough to go around.
Contrast that with paper money. With paper money, there’s no limit to how much can be created. However, gold is finite. That limits how much new gold can be refined each year.
You can see that cryptocurrencies actually have more in common with gold than with paper money.
Now that you understand that, let me explain how Bitcoin works…