Mintlayer Back to Basics #4

Bitcoin has experienced a sharp correction in recent weeks, falling roughly 30% from its October 2025 highs. For those new to Bitcoin, this volatility raises an obvious question: what exactly is this asset, and why do people believe in it?

The answer isn't about price predictions or short-term trading. It's about understanding what Bitcoin actually is, why it was created, and what makes it fundamentally different from every form of money that came before it. The recent downturn, while uncomfortable, hasn't changed any of these core properties. If anything, it provides an opportunity to understand Bitcoin at a moment when hype has quieted and fundamentals matter most.

Bitcoin in Simple Terms

Bitcoin is digital money that works without banks, governments, or any central authority. It allows anyone, anywhere to send value to anyone else over the internet, directly and irreversibly.

When you hand cash to someone, that money changes ownership. You can't spend it again because the physical bills moved from your hand to theirs. But digital money works differently. A digital dollar is just information, and information can be copied infinitely. You could theoretically send the same digital money to multiple people at once.

This is why traditional digital money requires someone to keep track. Banks, PayPal, Visa, and other financial institutions maintain ledgers that record who owns what and which transactions are valid. When you send money digitally, the bank checks its ledger to make sure you have the funds, then updates the records to show the money moved from your account to someone else's. You're trusting the banks or governments to maintain accurate records and not manipulate the ledger.

Bitcoin solved this problem in a completely different way. Instead of one company or government keeping the ledger, Bitcoin creates a shared decentralized ledger that thousands of independent computers around the world all maintain together. Every transaction ever made is recorded in this public ledger, called the blockchain. When you send Bitcoin, the entire network verifies you actually own it and haven't already spent it elsewhere. No single authority controls the records. No one entity can manipulate the ledger's history.

Think of it like a giant spreadsheet that everyone can see, but no single person can manipulate. Every Bitcoin transaction ever made, from the first one in 2009 to today, is recorded and verified by thousands of independent participants. This distributed verification is what prevents double-spending without needing to trust any bank, company, or government.

The Core Properties That Set Bitcoin Apart

Three characteristics make Bitcoin fundamentally different from every currency that preceded it.

Fixed Scarcity

Only 21 million Bitcoin will ever exist. This limit is written into the code and enforced by the entire network. You cannot print more Bitcoin. No government can decide to increase the supply.

Currently, over 19.95 million Bitcoin have been created, leaving fewer than 1.05 million left to be issued over the next century. Compare this to traditional currencies, where central banks create new money whenever they choose. Bitcoin's supply is mathematically capped and transparent.

Gold shares the property of scarcity, but there is the possibility of discovering new deposits for centuries into the future. While Bitcoin's 21 million cap is absolute. Once the last Bitcoin is created around 2140, no more can ever be made.

Programmatic Inflation Control

New Bitcoin enters circulation through a process that rewards computers for securing the network. But every four years, the rate of new Bitcoin creation gets cut in half in an event called "the halving."

The most recent halving occurred in April 2024. Before that, roughly 900 new Bitcoin were created daily. After the halving, only 450 are created each day. In 2028, it drops to 225 per day. This continues until eventually no new Bitcoin will be created at all.

This predictable schedule contrasts sharply with traditional monetary policy, where money supply decisions happen behind closed doors. With Bitcoin, the schedule is known decades in advance.

Permissionless Access

Anyone with an internet connection can use Bitcoin. No credit check required. No bank account needed. No government approval necessary.

For the roughly 1.4 billion adults worldwide who lack access to traditional banking, this represents a fundamental expansion of financial participation. For people living under authoritarian regimes or in countries with unstable currencies, Bitcoin offers an alternative that governments cannot easily confiscate or inflate away.

The network treats everyone equally, whether you're sending $5 or $5 million.

How These Properties Solve Real Problems

These properties solve real problems affecting billions of people.

Protection from inflation. When governments print money, the value of existing money declines. Bitcoin's fixed supply means your holdings cannot be diluted by someone else's printing press.

Financial sovereignty. Banks can freeze accounts. Governments can impose capital controls. Payment processors can block transactions. Bitcoin held in your own wallet cannot be frozen, seized, or blocked by any third party.

Global accessibility. Bitcoin works the same way everywhere. Sending Bitcoin from New York to Tokyo is identical to sending it across the street. No borders, no currency conversions, no international wire fees, no three-day delays. The network operates 24/7 without holidays.

Transparency and verifiability. Unlike gold in a vault or dollars in a bank, you can verify Bitcoin's supply and transaction history yourself. The entire system operates transparently with no trust required.

The Network's Security and Strength

Bitcoin's security comes from thousands of powerful computers competing to process transactions and secure the network. The computing power securing Bitcoin sits at all-time highs as of November 2025, more than at any point in its 16-year history.

Think of it like a bank vault. The thicker the walls, the more secure your money. Bitcoin's walls get stronger over time as more computing power joinsthe network's security has never been higher.

Bitcoin has successfully processed transactions for over 16 years without significant downtime or security breaches, handling tens of billions in daily transaction volume.

Why Bitcoin's Fundamentals Remain Unchanged

Despite price movements, Bitcoin's core properties remain exactly as designed. The 21 million supply cap, network security, decentralization, and permissionless access haven't changed. These aren't marketing claims that fluctuate with sentiment. They're encoded in cryptography and enforced by a distributed network.

Bitcoin has survived 16 years while most tech startups from 2009 disappeared. It grew into a network processing trillions in annual volume, secured by unprecedented computing power. The April 2024 halving reduced new supply by 50%, following a pattern that historically precedes appreciation as selling pressure meets steady demand.

More importantly, the use case for scarce, censorship-resistant digital money becomes more relevant as central banks expand money supplies and governments impose more controls. Institutions now recognize Bitcoin's role as a hedge against monetary debasement, providing structural support that didn't exist in previous cycles.

Bitcoin's value was never about short-term price. It's about the ability to store and transfer wealth without intermediaries, the certainty of supply that cannot be diluted, and security no single actor controls. The recent correction doesn't change these fundamentals.

Price will fluctuate but the 21 million cap, the decentralized security, the permissionless access, and the transparent operation remain immutable, verifiable, and mathematically guaranteed.

Bitcoin isn't going anywhere. The question is whether you understand why.