What is Bitcoin?

what is bitcoin

Bitcoin is a decentralized digital currency that was created in 2009 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto. It was the first cryptocurrency and remains the most well-known and widely used.

Bitcoin operates on a technology called blockchain, which is a distributed ledger that records all transactions made with the currency. Unlike traditional currencies issued by governments, Bitcoin is not controlled or regulated by any central authority, such as a central bank. Instead, it relies on a peer-to-peer network of computers, known as miners, to validate and secure transactions.

One of the key features of Bitcoin is its limited supply. There will only ever be 21 million bitcoins in existence, which makes it a scarce asset. This scarcity, along with increasing demand, has contributed to its value appreciation over time.

Bitcoin can be used as a medium of exchange for goods and services, but it is also often treated as an investment or store of value. It has gained popularity due to its potential for anonymity, security, and the ability to facilitate fast and low-cost transactions across borders.

To transact with Bitcoin, users need a digital wallet to store their bitcoins and a unique cryptographic key to access and transfer them. Transactions are verified by network nodes through cryptography and recorded on the blockchain, ensuring their integrity and preventing double spending.

It’s important to note that while Bitcoin has been influential in the development of cryptocurrencies, there are now thousands of other cryptocurrencies with different features and use cases.

What is Bitcoin?