So, what is Bitcoin.? Call it the holy grail; Bitcoin has for the past couple of years hit major headlines across the globe. As the world’s number one cryptocurrency, it’s not hard to see why. Although there are two schools of thoughts when it comes to all things Bitcoin, the crypto is the undisputed superstar of cryptocurrencies. Of course, it has completely changed the way we view and control the money. As such, if you want to get your feet wet in the world of cryptocurrency, Bitcoin is as good a place as any to get started.
Let’s take a closer look at a few Bitcoin essentials you ought to know.
So, What is Bitcoin?
In the wake of Occupy Wall Street, there was a growing sentiment among activists that there should be a decentralized financial system. Rightfully so, Bitcoin is a digital currency built around blockchain technology. Bitcoin creators wanted to put the user in charge, cut off the middleman, decimate interest fees, hack in the heart of corruption, and make the processing of transactions not only snappy, but also secure, transparent, and hassle-free
On a more technical level, Bitcoin is a free open source software with lines of code that are transacted, recorded or stored on the blockchain, a network of computers (also called nodes). When you transact with Bitcoin, you are actually sending a unique code to the recipient. Remember Bitcoin isn’t the only cryptocurrency; however, it’s the most popular and widely used.
Who, When, and How was Bitcoin Created?
There’s a lot of mystery around the actual creator of Bitcoin. It’s thought that a super-secretful individual (or group of people — who knows!) using the pseudonym Satoshi Nakamoto created Bitcoin back in 2008-2009. While the first BTC mined by Satoshi required hydraulics or stamping plants to mine, today’s miners can do it on the internet by solving high-level mathematical puzzles.
Once a full block of Bitcoins has been mined, it’s then added permanently to the blockchain network. The reward for mining a block of Bitcoins currently sits at 12.5 BTC. Interestingly, the value was 50 BTC for the first block, and the reward will halve after several years until all the Bitcoins are mined.
Bitcoin and Numbers
Unlike conventional currencies, Bitcoin has a limited supply, which is actually capped at 21 million BTC. That in and of itself makes Bitcoin much akin to today’s gold. It is estimated that the last Bitcoin will be mined before or around 2140 — interesting, uh?
Properties of Bitcoin
Most newbies to Bitcoin often wonder how does it look like? You see, Bitcoin is not cold cash; it’s simply a code that can be stored in a digital wallet. Similarly, a Bitcoin wallet is far different from your zipper wallet. It’s essentially [an open source] software that comprises one or several private keys which can be used to map out Bitcoin public addresses.
In other words, your Bitcoin private key is the only indicator that you indeed own a Bitcoin. Sadly, if you misplace your private key or it gets hacked, there is simply no way you can salvage it. Of course, there are a number of other properties that make Bitcoin quite alluring to most people.
Bitcoin Transactions are Anonymous
Bitcoin transactions offer a high level of anonymity — so much so that regulators are afraid they will fuel online fraud and criminal activity. Consider it a double-edged sword, Bitcoin accounts and transactions aren’t tied to any real-world identities.
Bitcoin Transactions are Borderless and Fast
Unlike traditional currency transactions, transacting Bitcoin is often instantly propagated on the blockchain and confirmed/accepted in a matter of minutes, if not seconds. Even better, these transactions are indifferent to the user’s geographic location. Whether you are sending Bitcoin to a next-door friend or someone across the globe, the transaction is always a breeze.
Bitcoin Transactions are Irreversible
Once confirmed, a Bitcoin transaction is a done deal and cannot be reversed. That means nobody, no government agency or involved parties can change it. It’s immutable. It’s no wonder Bitcoin has gained traction in sectors that need to weed out fraud.
Bitcoin is Secure
Bitcoin “currency” is locked in a public key using an impregnable cryptography system backed by blockchain technology. Thanks to the allure of big numbers and military-grade encryption, a Bitcoin address is so secured that it’s stronger than Fort Knox.
What is Bitcoin Recap:
The What & When: What is Bitcoin? it was the first cryptocurrency based on blockchain technology, created by a fellow called Satoshi Nakamoto in 2008.
The Why: Bitcoin offers a decentralized alternative to today’s highly controlled financial systems
The How: Bitcoin is designed to enable fully transparent transactions through a public/digital ledger — Blockchain