Bitcoin 101, Cryptopedia

What is Bitcoin?

In general, Bitcoin (BTC) is a type of digital currency. They aren’t printed like dollars or euros. In fact, the balances and transactions kept on a public ledger called...

Written by Wallebi Author · 3 min read >
What is Bitcoin?

In general, Bitcoin (BTC) is a type of digital currency. They aren’t printed like dollars or euros. In fact, the balances and transactions kept on a public ledger called blockchain. Bitcoin is a peer-to-peer network what means it’s not backed by any banks or governments and no single person or institution controls it. It came as first cryptocurrency which could get popular among public quickly and hundreds of other cryptocurrencies launched after that. If you are a beginner in crypto world this article may help you to understand the basics and become familiar with world’s number one cryptocurrency.

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Who was Bitcoin’s Creator?

Bitcoin was first introduced in 2009, by anonymous programmer or group of programmers named Satoshi Nakamoto. Some evidences show that he could be a 37-year-old man who lives in Japan. But he never posts on bitcointalk forum on Japan’s time zone and also his software not being labeled in Japanese. Although many people tried to unveil the real identity of Satoshi Nakamoto within past years, but still it remained as a mystery in crypto world. Anyone who referred, denied to be Satoshi.

Who controls Bitcoin?

One of the main advantages of Bitcoin that most people find it attractive is that no person, governments, banks or institutions control it. All the transactions are transparent. It means anyone can have access to blockchain and check the transactions or Bitcoin addresses balance.

How Does Bitcoin work?

As we mentioned above, Bitcoin is working on a public ledger called blockchain. This ledger contains all transactions that has ever processed. The records of transactions are “hashed” and then combined together into “blocks”. If someone wants to make any changes to the data stored on blockchain, it will also affect all of the following blocks. So, we can say it’s something impossible to make any changes on the data stored on blockchain.

Every transaction on the network needs to get verified by Specific types of users, called miners. Each transaction takes few minutes to get completed and every 10 minutes a new block get mined.

Bitcoin Characteristic Features

Decentralized

Bitcoin network is independent, it means that no person, government or any other institute does not control it. In fact, every person or user as well as every machine involved in mining and transaction verification process, becomes part of a huge network called blockchain. It means that even if some part of the network goes down, the network will keep working.

Anonymous

By opening a bank account and use it for our payments, we give authority to banks to have access to our personal information and data like addresses, phone numbers, credit history or even our spending habits. But for Bitcoin it would be different, to have an account on a Bitcoin wallet, doesn’t need to provide such these information or data. You just have a username and password to sign in to your wallet and get access to blockchain network.

Transparent

Bitcoin network is transparent. It means that every single Bitcoin transaction that ever happened is stored in the blockchain. Anyone who has access to blockchain can tell how much money is in a wallet address by studying the blockchain ledger. But still there is an option for those who wants to stay anonymous and that is using the wallets which provides prioritize opaqueness and security or use multiple addresses to transfer massive amounts of money.

 Fast

While normal bank transfers can take several days to get done for international and overseas transfers, Bitcoin transactions can happen within just a few minutes. It means you can send money internationally and the recipient will receive it almost instantly.

What can I buy with Bitcoin?

As Bitcoin is a complex form of payment, so it’s obvious that spending options are still limited, but every day new businesses from small local coffee shops to industry giants are joining to the network and accept BTC as a payment option. For instance, Microsoft and Dell accept payments in Bitcoin for the variety of their products, airlines such as AirBaltic and Air Lithuania also accept Bitcoin as a payment for their flight tickets. A variety of hotels, theaters, restaurants and websites are other options that could pay for their services by BTC.

Furthermore, Bitcoin is an opportunity for investment. Its price fluctuates 24/7, and a lot of people use it as an opportunity to invest in. Some others make profit by trading it in short term or long term.

How to get Bitcoin?

There are two ways of getting Bitcoin, you can rather buy it or get it through mining. To buy it you can use exchanges that provide cryptocurrency services. You can also find individuals who are willing to sell on marketplaces.

Mining process was easier just few years ago. But today a lot of big companies stepped into the game by using mining-specified devices. As a result, the difficulty and energy required to mine worthwhile amounts of Bitcoin has increased.

Written by Wallebi Author
Author and analyst in the field of cryptocurrency Profile

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