The power of Bitcoin comes from belief in its value which stems from its immunity from inflation, its immunity from government interference, its inherent rarity and its ease of transfer around the world.

When I say Bitcoin I include some other parts of the Blockchain that share its inherent stability whose parts are listed above.

Bitcoin’s transactions are registered and verified by computer calculations, thousands and thousands of them all across the world. There are groups of computers that work together, called mining pools, that have a lot of the required computing power (hash rate) to complete verification. As these mining pools are located in different countries, they are not easily susceptible to being corrupted or controlled.

In recent years some countries have banned Bitcoin and there have been many attempts to regulate its activities. Attempts to monitor the use of Bitcoin are ongoing and are usually accompanied by comments that Bitcoin is used for crime or tax evasion. These can only be excuses, as a lot of crime relies on cash, something that is far less traceable than Bitcoin.

The real power of Bitcoin relies on the internet and the ability to transfer data around the world constantly. There are many cases where access to the internet from within a country is controlled by government. Control of this kind unfortunately stifles trade and certainly has not had a negative effect on Bitcoin.

The internet is constantly evolving with a steadily increasing proportion of the population having access to it. As the development of commerce, international trade and development relies on the internet it is unlikely to disappear soon.

I am especially interested in the effect of Bitcoin on countries with high inflation and the unabnked population, something I will talk about another time.