What is Bitcoin?
Bitcoin is the original form of cryptocurrency, a digital currency created and held electronically. It is decentralized, so no one controls it. They aren’t printed, like dollars or euros, they are created by individuals and companies using computing power from all over the world, that run software that solve mathematical problems. It is the first, and most well known form of cryptocurrency.
What makes Bitcoin and other cryptocurrencies different?
Bitcoin can be used electronically to purchase goods and services from a growing number of vendors. In that sense, it is much like conventional currency, such as the U.S. Dollar or the Euro. Where Bitcoin differs is that it is decentralized. This means that no single individual or institution controls the network. This puts a lot of people at ease, as a major bank can’t exert control over their money with Bitcoin.
Who created It?
A software developer by the name of Satoshi Nakemoto initially proposed Bitcoin, an electronic payment system based on mathematical proof. The concept was to produce a currency independent of any central authority, which would be transferable electronically, with low transaction fees.
How Many Bitcoins are there?
The Bitcoin protocol – the rules that make Bitcoin work – state that only 21 million Bitcoins can ever be created. However these Bitcoins can be divided into smaller amounts, the smallest of which is one hundred millionth of a bitcoin (0.00000001). That is called a Satoishi after Bitcoin founder Satoshi Nakemoto.
More About Bitcoins
Just a few more things to note about Bitcoins. The most important, that we’ve already mentioned is that it is decentralized. This means no single authority can exert control over your coins. This also means redundancy in the Bitcoin network. If any single machine on the network goes down, others can step in and fill the void, keeping transactions running smoothly.
It’s also worth mentioning again that it is deflationary. Because only a finite amount of coins exist, the supply is limited. A government can’t simply print more when times are tough for their Bitcoin holdings. This makes Bitcoin an attractive currency for investors, looking to escape the inflationary banking system.
Another great aspect of Bitcoin is that is is anonymous mostly. Bitcoin addresses aren’t linked to names or addresses or any other kinds of personally identifiable information. But the network itself is completely transparent. Every single transaction that has ever happened in the network is viewable in the huge general ledger, called blockchain.