Bitcoin vs. fiat money: issuance, control and claims

Native bitcoin is not a central issuer's liability. With self-custody, you authorize spending using keys; a bitcoin account with a company instead adds dependence on that company's performance.

A bank deposit is a claim on a commercial bank. Cash and central bank reserves are other forms of money; fiat money does not mean only paper banknotes.

New issuance corresponds to the subsidy component of the block reward, whose permitted amount gradually declines. Under consensus rules, total issuance will not exceed 21 million BTC; transaction fees only transfer existing bitcoin.

A commercial bank typically creates a matching deposit when it grants a loan; repayment of principal destroys such deposit money. A central bank creates reserves through a different mechanism. The quantity of money also depends on the chosen aggregate definition.

A Full Node checks block, spending and reward rules. Even greater mining power cannot make that node accept a block violating its rules; verifying the network does not establish a custody company's solvency.

A customer checks their statement but does not validate the bank's entire accounting through a public node. They rely on the bank and relevant institutions; aggregate monetary statistics are not the same as verifying every individual liability.

A valid transaction is included in a block, and further blocks reduce reorganization risk under usual security assumptions. Confirmations are not absolute mathematical irreversibility; time and fees are not fixed guarantees.

An account balance change and interbank settlement are different steps. For example, T2 settles payments in central bank money with immediate finality. Dispute or refund rights depend on the particular service and rules.

Self-custody carries the risk of lost or misused keys; the network offers no ordinary access reset. Value in another currency can fluctuate sharply. Custodial services add provider risks.

Cash can be lost or stolen, and a deposit depends on the bank. A nominal balance alone does not guarantee purchasing power. Deposit protection and error remedies have conditions depending on the country and product; they are not universal guarantees.