So you've heard about Bitcoin and you're wondering what the deal is, right? Well, it's actually a lot more simple than most people realize.
Bitcoin is a peer-to-peer digital currency that can be used to send payments online. It was created by an anonymous programmer or group of programmers under the name Satoshi Nakamoto in 2009 and released as open source software in 2010. Bitcoins are "mined" by computers that solve complex math problems and help to maintain the network.
But what does this have to do with CBDCs?
A CBDC (Central Bank Digital Currency) is an electronic unit of value issued by a central bank. It's digital money that's backed by physical cash in the bank's vault, or another form of collateral held by the central bank. In other words, it is digital fiat money—or debt-based money that is not backed by anything tangible—issued by a central bank to replace physical cash. The US Federal Reserve and the EU are looking into introducing the first iterations of CBDCs in the next few years.
There are many reasons why experts believe we'll see more CBDCs in the future—from increased government transparency and accountability, to an eventual absolute oversight on what and how people spend their money.
It's very simple, you can choose a CBDC or you can choose Bitcoin. One system is open, transparent and decentralized. The other system will be closed, centralized and the monetary policy can be changed on a whim. The choice is yours.
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