Bitcoin is a digital currency created in 2009 by a mysterious stranger by the name of Satoshi Nakamoto, whose true identity has not yet been verified. Transactions are done without intermediaries, which means, no banks. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantaneously, with very low transaction costs.
There are no physical bitcoins, only balances kept on a public ledger in the cloud, which with all BTC transactions is verified by a huge amount of computing power. Bitcoins are not issued or backed by banks or governments. Although it is not legal tender, Bitcoin charts are very popular and have triggered the launch of other virtual currencies called Altcoins.
You should know that Bitcoin is the first cryptocurrency, invented following the 2008 subprime stock market crisis, by Satoshi Nakamoto. We still don’t know who this Satoshi Nakamoto is: is he a person? a group of people? A man? A woman? The mystery remains unsolved. What is certain is that Bitcoin was thought and invented to give the population back control over money. Long considered a money-laundering tool, the confidence that the world has in BTC today gives it its current value, which reaches several thousand euros, for a market capitalization of tens of billions of euros. Just that. Bitcoin now dominates the cryptocurrency market, and if it has no technological value strictly speaking unlike Ethereum for example, it is perceived as the benchmark, the safe haven.
Bitcoin is created digitally, by a community of people that anyone can join. BTC is ‘mined’, using computing power in a distributed network.
This network also processes transactions made with virtual currency, making BTC its own payment network.
So you will understand, you cannot generate BTCin unlimited quantities. This is very true because the Bitcoin protocol and the rules that make it work dictate that only 21 million bitcoins can be created by miners. However, these coins can be broken down into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a ‘Satoshi’, according to the founder of bitcoin).
Conventional currency has been based on gold or silver. Theoretically, you knew that if you put a dollar in the bank, you could get gold back (although that doesn’t work in practice). But BTC is not based on gold; it’s based on math.
All over the world, people are using software that follows a mathematical formula to produce BTC. The mathematical formula is available for free so that anyone can verify it.
The software is also open-source, which means anyone can track it down to make sure it’s doing what it’s supposed to do.
Bitcoin can be used to purchase goods anonymously. Also, international payments are easy and cheap, as BTC is not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping it will go up in value.
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