In today's topic we will compare what is Bitcoin and fiat currency like USD.📚
INTRO
• Bitcoin a decentralized digital currency that operates on a peer-to-peer network using blockchain technology. Created in 2009 by an anonymous person or group known as Satoshi Nakamoto.
• On the other hand US Dollar, an official currency of the United States and is issued and regulated by the US government through its central bank, the Federal Reserve. As a fiat currency, its value is not backed by a physical commodity but rather relies on the trust and stability of the US economy.
• Both mains purpose is to act as a store of value and a medium of exchange, while Bitcoin aiming to provide an alternative to traditional fiat currencies that are controlled by governments and central banks.
THE SUPPLY
• Bitcoin has a capped supply of 21 million coins, making it a deflationary asset. This means no more Bitcoin will be added into circulation. In fact, few Bitcoins are getting burned. So there will be less than 21 million coins supply in reality. Also, the rate of new coin creation slows over time, by reducing the rewards mined by miners by half (currently 6.25 BTC). This process is called Bitcoin halving, which happens every 4 years.
• While, the supply of US Dollars is controlled by the Federal Reserve, which can influence the money supply through monetary policy mechanisms like open market operations and interest rates.
CONCLUSION
• Bitcoin is decentralized digital currency and it's deflationary making it price valuation increase overtime. The supply is fixed while the demand is increases.
• USD is a centralized currency which controlled by the authority, it's subject to inflation, it has unlimited supply.
• Bitcoin represents a decentralized, digital alternative to traditional fiat currencies, while the US Dollar remains the world's primary reserve currency.
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