Date: Wednesday, 22nd January
Role: Head of Business Development
Welcome to the Beginner's Guide to Bitcoin:
Bitcoin can be intimidating for beginners. The protocol is complicated, the community can be aggressive and unforgiving, silly mistakes can lose you money, and it is easy to succumb to altcoin marketing.
Bitcoin does though, offer you the opportunity to hold a new type of monetary asset, one which can't be seized by the government and is censorship resistance and It has the potential to change the way the world.
The goal of What Bitcoin Did has always been about making things simple; there are no stupid questions, and the show is here to help beginners navigate this new world. To kick off 2020, we are launching a special series to help beginners understand Bitcoin. We will be looking at the basics from breaking down the protocol to explaining the economics and discussing the potential societal shift.
Beginners Guide Part 7 - Bitcoin's Monetary Policy with Dan Held
In our current economic system, currency is issued by the central banks. As fiat (government-issued money) is no longer backed by gold or any other scarce asset these central banks are able to print, or issue money at will.
As more and more money is printed and enters circulation, the money you hold in your bank account becomes a smaller percentage of the total supply and therefore loses value. This by de-facto promotes spending rather than saving and by many, is seen as a flaw in the financial system.
When Satoshi released the Bitcoin protocol, it offered an alternative to this system: scarce digital money. Satoshi gave Bitcoin a fixed supply of 21 million Bitcoins. He also designed an issuance schedule of 50BTC every ~10 minutes which is cut in half every 210,000 blocks (~4 years).
The exact number of the total supply of Bitcoin is not important and it doesn’t matter that the issuance schedule is designed exactly as it is, what is crucial is that this monetary policy can’t be changed.
These rules are part of the Bitcoin protocol and can not be amended or changed without a hard fork. Social consensus for a change like this would almost certainly never happen and Bitcoiners can be confident that their Bitcoin holdings will not lose value to do inflation.
In Part 7 of the Bitcoin Beginner’s Guide, I talk to Dan Held Bitcoin OG and Director of Business Development at Kraken to look at Bitcoin’s monetary policy. We discuss how the economy works, the 21 million hard cap, the release schedule and block rewards.