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src/edu/en/bitcoin/bitcoin-economics/bitcoin-as-a-cryptocurrency.md
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# Bitcoin as a Cryptocurrency ๐ฐ | ||
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## BTC as the Native Unit | ||
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## BTC as the Native Unit | ||
Bitcoin (BTC) is the main currency used on the Bitcoin network. It is the **first decentralized digital currency** and is recognized globally as a new form of money. All transactions within the network are settled in BTC, making it the primary unit of value. ๐ | ||
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**๐ Scarcity and Practical Supply** | ||
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**๐ Scarcity and Practical Supply** | ||
Bitcoin's fixed supply is capped at **21 million coins**, making it scarce by design. However, the actual number of Bitcoins available is even smaller. Many Bitcoins have been lost due to forgotten passwords or misplaced wallets, reducing the number of coins that can ever be used. It's estimated that about 4 million Bitcoins are gone forever, and a large number of Bitcoins are held by long-term investors who rarely sell. ๐ | ||
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In practical terms, the number of Bitcoins actively traded on exchanges or distributed through mining rewards and ETFs (Exchange-Traded Funds) is much smaller than the theoretical supply. This real-world scarcity makes Bitcoin even more valuable over time. ๐ | ||
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**๐ข Divisibility and Satoshis** | ||
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Even though Bitcoin is scarce, it's highly divisible. Each Bitcoin can be broken down into 100 million units, known as **Satoshis**. This means you don't need to buy a whole Bitcoin to use itโsmall fractions can be used for everyday transactions, making Bitcoin accessible to anyone. ๐ฌ |
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# Bitcoin Mining โ๏ธ | ||
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## ๐ Creation and Circulation | ||
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## ๐ Creation and Circulation | ||
Bitcoin mining is the process through which new Bitcoins enter circulation. This involves specialized computers, known as miners, solving puzzles to validate transactions on the Bitcoin network. Successful miners are rewarded with newly created Bitcoin. Every 10 minutes, a new block is added to the blockchain, and the reward is given to the miner who solved the puzzle. โฑ๏ธ | ||
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Initially, the reward was 50 BTC per block, but it halves every four years in an event called the **halving**. Currently, the reward is 6.25 BTC per block, and it will continue to decrease until Bitcoin's total supply reaches 21 million. ๐ | ||
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## ๐งฎ Proof of Work (PoW) and Mining Difficulty | ||
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## ๐งฎ Proof of Work (PoW) and Mining Difficulty | ||
Bitcoin operates on a system called **Proof of Work (PoW)**, where miners compete to solve puzzles that require immense computational power. The more miners compete, the harder the puzzles become. The difficulty adjusts every two weeks to maintain a steady flow of new blocks, regardless of how much computing power is added. ๐ป | ||
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To give an idea of the scale: Bitcoin's network now processes such an enormous amount of computing power that it surpasses even the world's most powerful supercomputers. The computing power behind Bitcoin is greater than anything humanity has built, illustrating the sheer size and security of the network. ๐ | ||
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### ๐ Global Mining Efforts | ||
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As Bitcoin grew in value, large-scale operations entered the mining space, from energy companies to governments. Mining is no longer limited to individuals but has evolved into an industrial-scale operation. In some countries, like the U.S. and Kazakhstan, Bitcoin mining is now seen as a strategic asset, with renewable energy sources and excess power being used to mine Bitcoin. The involvement of governments and corporations highlights Bitcoin's global importance and shows how it has become intertwined with the energy industry. โก | ||
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## โ๏ธ Halving Events | ||
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## โ๏ธ Halving Events | ||
Approximately every four years, the reward miners receive for creating new Bitcoin is halved, a process known as a **halving event**. This limits the supply of new Bitcoin and is crucial to Bitcoin's deflationary nature. The first halving occurred in 2012, and the reward has since decreased from 50 BTC per block to the current 6.25 BTC. Halving events ensure that Bitcoin's supply remains scarce over time, increasing its potential value as new Bitcoin becomes harder to earn. ๐ |
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src/edu/en/bitcoin/bitcoin-economics/economic-principles-of-bitcoin.md
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# Economic Principles of Bitcoin ๐ | ||
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## ๐ Supply and Demand Dynamics | ||
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Bitcoin operates under basic economic principles: as demand increases and supply remains fixed, the price rises. Unlike traditional assets like **gold**, where higher prices encourage more production, Bitcoin's supply cannot be increased no matter how high the price goes. This unique feature, where **supply is fixed (and actually decreasing with every halving)**, gives Bitcoin the potential for rapid price increases (often referred to as **parabolic price growth**) when demand surges. As fewer new Bitcoins enter circulation after each halving, the scarcity grows, further driving demand. This scarcity, combined with rising interest, has the potential to drive Bitcoin's price significantly higher over time. ๐ | ||
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## ๐ Bitcoin vs. Traditional Assets | ||
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Bitcoin is often compared to traditional assets like gold or fiat currencies. Like gold, Bitcoin is considered a store of value because of its scarcity. However, unlike gold, Bitcoin can be easily transferred and traded across borders, making it more flexible. In contrast to fiat currencies, which can be printed by governments and are vulnerable to inflation, Bitcoin has a fixed supply, making it resistant to inflation. Its decentralized nature also ensures it operates outside of government control, giving it unique advantages in the modern financial world. ๐ผ |
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src/edu/en/bitcoin/bitcoin-network/decentralization-and-security.md
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# Decentralization and Security | ||
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## Open Participation | ||
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One of the key features of the Bitcoin network is that it is **open to anyone** who wants to participate. Unlike traditional financial systems, which often require permission or special access, anyone with an internet connection and a computer can join the Bitcoin network. You can choose to run a full node, validating transactions and maintaining a copy of the blockchain, or you can simply use a wallet to send and receive Bitcoin. This openness ensures that Bitcoin remains decentralized. No government, corporation, or central bank controls the network. The rules of Bitcoin are enforced equally for all participants, whether they are running nodes, mining, or using the network to transfer value. ๐๐ฅ | ||
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## Public Development Process | ||
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## Public Development Process | ||
The development of Bitcoin is also decentralized and fully transparent. There is no central authority deciding how Bitcoin evolves. Instead, improvements and updates are proposed by the community through a process known as **Bitcoin Improvement Proposals (BIPs)**. These proposals are reviewed, discussed, and debated by developers all over the world. Once a proposal is agreed upon by a majority of the network's participants, it is implemented in the Bitcoin code. This ensures that Bitcoin remains secure and up-to-date, without being controlled by a single organization. The fact that anyone can contribute to Bitcoin's development process is a key part of its decentralization and longevity. ๐ง๐ | ||
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## Absence of Central Authority | ||
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## Absence of Central Authority | ||
Unlike traditional currencies or financial systems that are controlled by central banks or governments, Bitcoin operates **without any central authority**. This is one of its most defining characteristics. The Bitcoin network is maintained by a decentralized group of participants (nodes and miners) who collectively enforce the network's rules. This decentralization ensures that no single entity can manipulate or shut down the Bitcoin network. Even if one government or organization tries to block Bitcoin, the network will continue to operate elsewhere, as long as there are nodes and miners keeping the system running. This absence of a central authority makes Bitcoin resilient to censorship and government control. ๐๐ก๏ธ |
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# Is Bitcoin Stoppable? | ||
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## Government Influence | ||
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## Government Influence | ||
There has been much debate about whether governments can stop Bitcoin. While governments can impose regulations and make it difficult for users to participate in the network, they **cannot stop Bitcoin from operating**. Bitcoin is decentralized, meaning that even if one country tries to ban it, the network will continue to run in other parts of the world. Governments can make it difficult for people to convert Bitcoin to their local currencies or regulate exchanges, but they cannot prevent people from using Bitcoin entirely. As long as people have access to the internet and the Bitcoin network, Bitcoin will continue to operate. ๐๐ | ||
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## Technical Resilience | ||
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## Technical Resilience | ||
Bitcoin's resilience comes from its **decentralized structure**. The network is distributed across thousands of nodes worldwide, making it nearly impossible to shut down. For Bitcoin to stop functioning, all nodes and miners would have to go offline simultaneously, which is highly unlikely. Even if some nodes or miners go offline, the network can still function with the remaining participants. This level of resilience makes Bitcoin one of the most secure and reliable networks in existence. As long as people have access to electricity and the internet, the Bitcoin network will continue to run. Its decentralized nature also makes it resistant to attacks, as no single point of failure can bring down the entire network. ๐๐ | ||
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## User Adoption and Value | ||
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## User Adoption and Value | ||
The value of the Bitcoin network is directly tied to its users. The more people who use Bitcoin, the more valuable and secure the network becomes. As adoption grows, so does the demand for Bitcoin, which in turn drives its price higher. For Bitcoin to lose its value, people would have to stop using it altogether, which is highly unlikely given its global appeal and use cases. The network's value is not controlled by any government or organization but is instead driven by the collective actions of its users. As long as people continue to use Bitcoin, the network will remain valuable and secure. ๐ฅ๐น |
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src/edu/en/bitcoin/bitcoin-network/the-bitcoin-network-structure.md
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# The Bitcoin Network Structure ๐๏ธ | ||
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## Network Nodes | ||
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## Network Nodes | ||
At the heart of the Bitcoin network are **nodes**. A node is any computer running the Bitcoin software, and its job is to help maintain the integrity of the network. Every node stores a complete copy of the Bitcoin blockchain, meaning it holds a record of every transaction ever made. Nodes communicate with each other to verify transactions and ensure that the network runs smoothly. When a transaction is made, it is broadcast to all nodes. These nodes validate the transaction by checking the user's balance and ensuring the rules of the network are followed. Once verified, the transaction is added to a pool of unconfirmed transactions, awaiting confirmation by miners. The fact that anyone can run a node ensures that Bitcoin remains decentralizedโno single entity controls the network. ๐๐ก | ||
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## Miners and Mining Nodes | ||
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**Mining nodes**, or miners, play a special role in the Bitcoin network. In addition to storing a copy of the blockchain and validating transactions like regular nodes, miners are responsible for grouping transactions into **blocks** and adding them to the blockchain. To do this, they must solve complex mathematical puzzles, which requires significant computational power. This process is known as **Proof of Work (PoW)**. When a miner successfully solves the puzzle, they create a new block and are rewarded with freshly minted Bitcoin, along with the transaction fees from the transactions included in that block. This process ensures that new Bitcoins are created in a decentralized manner and that transactions are permanently recorded on the blockchain. Mining not only adds new blocks to the chain but also keeps the network secure by making it difficult for any single entity to take control. ๐งฎ๐ป |
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