Bitcoin is almost synonymous with the term “cryptocurrency”, as it is the first one to be developed, the most well known, and still by far the largest by just about any metric one might use to compare it to others. That may change though, as new cryptocurrencies emerge to fill niche markets and offer different approaches to issues of security, speed, and privacy.
Bitcoin originally started out as an attempt to build an online cash system, which are the terms used to describe it in the original whitepaper that defined its creation in 2009.
Since that time, various interested parties have disagreed about that original vision, and Blockstream, the organization most in control of Bitcoin’s development, proposed that Bitcoin should be a “settlement layer”. Under this paradigm, Bitcoin would not be accessed directly by end users, as Bitcoins themselves would be too valuable and expensive to move for most people. Instead, all transactions would be handled through secondary systems such as “SegWit” and “Lightning” and then be settled in aggregate on the Bitcoin blockchain. This approach has been compared to how money has sometimes in the past been a secondary system that stands in for high-value assets like gold. People transact in cash, and then banks collectively settle large groups of transactions by trading between themselves in gold.
A large community of people want Bitcoin to operate in a similar fashion, partly because they believe that high fees for transacting Bitcoin is critical for incentivizing miners to keep the network running.
Bitcoin’s blockchain is mined on dedicated computers known as an Application-Specific Integrated Circuit, or ASIC. These are computer chips dedicated to the mining of Bitcoin, and coins derived from the same codebase as Bitcoin, such as Bitcoin Cash and Litecoin. With a large number of miners having invested in ASIC computers for the sole purpose of mining Bitcoin, they have a strong incentive to see Bitcoin sustained in the marketplace. Bitcoin is pseudo-anonymous, which means…