What is Bitcoin? BTC
Explainer
Bitcoin is the first and most well-known cryptocurrency, created in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. It operates on a decentralized network of computers (nodes) that collectively maintain a public ledger called the blockchain.
At its core, Bitcoin is a digital currency that enables peer-to-peer transactions without the need for intermediaries like banks or financial institutions. Transactions are verified and recorded on the blockchain through a process called mining, where miners use computational power to solve complex mathematical puzzles and add new blocks to the blockchain.
Key features of Bitcoin include:
Decentralization: Bitcoin operates on a decentralized network, meaning there is no central authority or single point of control. This makes it resistant to censorship and manipulation by governments or institutions.
Limited supply: Bitcoin has a capped supply of 21 million coins, making it a deflationary asset. This scarcity is built into the protocol and helps preserve the value of Bitcoin over time.
Pseudonymity: While Bitcoin transactions are recorded on a public ledger, the identities of the parties involved are not directly tied to their public addresses. This provides a degree of privacy and pseudonymity for users.
Security: Bitcoin uses cryptographic techniques to secure transactions and protect the integrity of the network. The decentralized nature of the network and the consensus mechanism (Proof of Work) ensure that transactions are valid and secure.
Borderless nature: Bitcoin transactions can be sent and received anywhere in the world, 24/7, without the need for traditional banking infrastructure. This makes it a global and accessible form of money.
Bitcoin has gained widespread adoption as a store of value, medium of exchange, and investment asset. Its decentralized nature, scarcity, and security features have made it a popular choice among individuals and institutions seeking an alternative to traditional fiat currencies.