What is Bitcoin?

This year all supporters and admirers of bitcoin celebrated 9 years from the ‘birth’ of the first cryptocurrency in the world. Certainly not everyone is familiar with the concept of bitcoin, and here we will try to explain it in easy words.

Nov 27, 2017

Bitcoin is the first decentralized digital currency. Its system is peer-to-peer, and transactions take place between users directly, without an intermediary. It allows people to send or receive money across the internet, even to someone they don’t know or don’t trust. It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2008. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Read our article about blockchain in the previous post.

Cryptocurrencies like bitcoin, ethereum, litecoin, and others, are one of a kind from various perspectives when compared with cash or another traditional currency. First of all they are mined, not printed. To mine a bitcoin, computers run specialized software. Because of how complicated the math needed to generate a bitcoin is, they must be calculated with very powerful processors. When it started out, it was relatively easy to mine bitcoins, but as more people are trying to get in on the action, it's become computationally much more challenging. Mathematical field of cryptography is the core field which keeps bitcoin secure. 

All information concerning the bitcoin money supply itself is readily available on the blockchain for anybody to verify and use in real-time. No individual or organization can control or manipulate the bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
Transactions made in bitcoins are non-reversible and bitcoin wallet accounts can’t be frozen. 

Another difference between online transactions with bitcoin and regular money is that bitcoin can be used without having to link any sort of real-world identity to it. Unless someone chooses to link their name to a bitcoin address, it is hard to tell who owns the address. Bitcoin does not keep track of users; it keeps track of addresses where the money is.

Bitcoin adoption and use keeps on growing a lot every year not only for consumers, as well as for many companies, who are hoping to use all of the advantages of bitcoin. We believe in perspective future of bitcoin and daily news feeds informing about the development of the bitcoin network, as well as the adoption of various legislative acts regulating this sphere in different countries of the world, indicate that this is a strong global trend.

 

Sources:
http://www.coinexpansion.com/bitcoin-explained/
https://simple.m.wikipedia.org/wiki/Bitcoin
http://www.wired.co.uk/article/bitcoin-101
http://www.valuewalk.com/2017/06/bitcoin-mining/

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