6.4 Key Characteristics of Bitcoin

Decentralization and Trustlessness

Bitcoin operates on a decentralized network, free from control by any central authority. This decentralization ensures:

• Security: Transactions are secured through cryptographic protocols and validated by network participants (nodes and miners).

• Censorship Resistance: No single entity can censor transactions or control the network, fostering financial freedom.

Limited Supply and Scarcity

Bitcoin's monetary policy is defined by its protocol, which caps the total supply at 21 million coins. This scarcity mirrors precious metals like gold, ensuring:

• Preservation of Value: Limited supply prevents inflationary pressures, making Bitcoin a deflationary asset over time.

• Predictable Issuance: New bitcoins are issued in a controlled manner through mining rewards, decreasing over time until the total supply is reached.

Transparency and Auditability

Bitcoin's blockchain ledger records all transactions publicly, providing:

• Transparency: Anyone can view transaction history and verify the integrity of the network.

• Auditable Supply: The total circulating supply of bitcoins is publicly auditable, ensuring trust without reliance on third parties.