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by cloakandswagger
3260 days ago
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The vast majority of fiat currency are 1s and 0s stored on computers, the only difference being: 1) Bitcoin is tracked by a global, immutable ledger, whereas you have no idea what kind of potentially krufty, in-house software your bank is tracking your money with. 2) There is a finite number of Bitcoins that can ever exist, whereas 100 trillion new units of your fiat could be created at the push of a button. |
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1) US federal reserve keeps track of all US currency held by banks and the transactions between banks. The banks you use are a separate layer on top of this system, but because of the FED's ledger transactions are ultimately reversible.
2) The actual number of bitcoins that currently exist is in practice not really known. If Satoshi Nakamoto's wallet did a transaction there would suddenly be a lot more bitcoins in play, devaluing the other coins. So, effectively the number of bitcoins can increase at any time.
Further, the number of existing dollars means there is no meaningful way to suddenly devalue them. At worst inflation can rise, but you can swap currency before that ends up costing you 2% thus making it irrelevant.