Letter #19: Hindsight is 20/20; But Bitcoin is Forever
The Bitcoin blockchain a powerful monetary network. Large amounts of value are transferred across the blockchain daily and Bitcoin is worth over $600 billion U.S. dollars at current exchange rates. And just like the monetary networks we’re familiar with and use daily, such as those managed by Visa and PayPal, the Bitcoin network facilitates hundreds of thousands of transactions.
Because of these similarities with the monetary networks that support banking and credit card infrastructure, it’s common to hear people compare Bitcoin directly to the companies that own and operate those networks. In fact, one of the most frequent disparagements against Bitcoin by its critics is that centralized networks like Visa’s and PayPal’s can facilitate thousands of transactions per second while the Bitcoin network can only handle about seven transactions per second on its layer one infrastructure (we’ll discuss in other articles how Bitcoin companies and layer two protocols increase the Bitcoin network’s throughput exponentially).
There are a variety of important differences between the Bitcoin network and the centralized monetary networks we’ve mentioned above. However, perhaps the most important difference between them is one of the Bitcoin network’s most basic security features: Bitcoin is irreversible.