What is Bitcoin?

 What is Bitcoin?

Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. Bitcoin’s creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.”

Each and every Bitcoin transaction that’s ever been made exists on a public ledger accessible to everyone, making transactions hard to reverse and difficult to fake. That’s by design: Core to their decentralized nature, Bitcoins aren’t backed by the government or any issuing institution, and there’s nothing to guarantee their value besides the proof baked in the heart of the system.

“The reason why it’s worth money is simply because we, as people, decided it has value—same as gold,” says Anton Mozgovoy, co-founder & CEO of digital financial service company Holyheld.

Since its public launch in 2009, Bitcoin has risen dramatically in value. Although it once sold for under $150 per coin, as of March 1, 2021, one Bitcoin now sells for almost $50,000. Because its supply is limited to 21 million coins, many expect its price to only keep rising as time goes on, especially as more large, institutional investors begin treating it as a sort of digital gold to hedge against market volatility and inflation.

Even so, it is not easy to grasp Bitcoin and its implications. Here are some other definitions and analogies of bitcoin according to people who have studied Bitcoin for years.

Native Internet money that’s controlled by no one & accessible to anyone. Rather than trusting an authority to do the accounting, many users run accounting software to ensure nobody cheats. Transactions are secured from reversal by large amounts of energy. https://t.co/vV2QRSgZM4— Jameson Lopp (@lopp) June 1, 2019

Bitcoin is the perfect combination of a peer to peer network and a distributed cryptographic system that weakens the current monopoly of power held by the central banks, central governments, and big corporations that would otherwise have us be slaves of their totalitarian society— wiz (@wiz) May 13, 2019

Bitcoin got another property, it bring a violentless revolution!— Jon ₿ ⚡️ (@Jonbros01) May 13, 2019

Exactly, it empowers the sovereign individual to peacefully opt-out of the bank/government fiat currency system and opt-in to a fair monetary system governed by incorruptible consensus rules enforced by math and cryptography and only changeable with the consent of all the users— wiz (@wiz) May 13, 2019

Bitcoin is like early electricity. Raw, dangerous, seems very volatile and hard to use. With time though it’ll start to feel safer, easier and normal. Like electricity it will inspire and power new unimaginable industries. And one day we’ll wonder where did Bitcoin come from?— O₿iWan (@ObiWanKenoBit) May 12, 2019

#bitcoin is a censorship-resistant, immutable, global digital currency which is borderless and completely decentralized. It is also a “Store of Value” to hedge against the inflationary fiat currency.— ⚡CRYPTOLOGIST⚡ (@kadhirvelavan) May 12, 2019

Unstoppable money— Alex Fortin (@realAlexFortin) May 12, 2019

Bitcoin is is the marriage of economics and computer science; a digital deflationary currency and ledger run on a decentralised network, which was launched to replace the current inflationary fiat system, following the 2008 economic crash.— ₿TCkitty (@CryptoSenseYT) May 12, 2019

Bitcoin is BitTorrent for money. You can’t shut it down, because it’s everywhere and nowhere. Nobody controls it, because you control it. It is the scarcest substance ever created and can be transported by sharing information. Ignore it at your peril.— Gigi (@dergigi) June 2, 2019

BTC prevents double spends w/o a single point of failure. BTC is more needed every day as the world goes cashless because it’s the best bearer asset, like physical cash or gold, but online. A BTC transaction is hard to stop, seize, change or revert. Many A+ devs improving BTC.— Craig Wrong®️ (@YangVentures) June 1, 2019

Unconfiscatable, Censorship Resistant Payment w/ a Store of Value due to Deflationary Gold Like Hard Money Properties. Cause of Satoshi’s invention of Proof Of Work that burns electricity for security, coded as Open Source w/ decentralized Consensus by Validating Nodes.-#Bitcoin— Tone Vays [#UnderstandBit] (@ToneVays) June 1, 2019

From my book: “Bitcoin can be best understood as distributed software that allows for transfer of value using a currency protected from unexpected inflation without relying on trusted third parties”— Saifedean Ammous (@saifedean) June 2, 2019

Shared ledger where everyones balances are written. You can only spend using your password, which only you know. Inflates 4% annually so some people keep the sheet honest.— Richard Heart Pumpamentals.com (@RichardHeartWin) June 1, 2019

Bitcoin is:
– a system for storing and transferring value through a communications medium which allows the recipient to verify the integrity of the transfer themself; &
– the first version of that system as initiated by Satoshi Nakamoto and fairly distributed from 2009 to present— nic carter (@nic__carter) June 1, 2019

Currency kept alive by distributed network of horcruxes— Mike Elias (@harmonylion1) June 1, 2019

– your hedge against bad government devaluing savings through inflation
– tx can’t be stopped by a bank
– wallet can’t be closed by anyone
– receiving money abroad is faster & cheaper than via bank
– not suitable for money laundering
– not suitable for 3rd party custody— Alena Vranova (@AlenaSatoshi) June 2, 2019

We need hard money to store value across time, but parasites want to inflate. We need dark money to exchange value across people, but parasites want to track/tax. Central entities providing hard/dark money got shut down by powerful parasites. So we invented an unshutdownable way.— Giacomo Zucco [I identify as ‘SJW-ism is a Fraud’] (@giacomozucco) June 1, 2019

Bitcoin is a form of money used to save and transfer value, created by and exchanged among people in an entirely voluntary manner, not subject to the whims of politicians, bankers, or economists.

This has never existed before.— Johnathan Corgan (@jmcorgan) June 2, 2019

Free speech money.— Gab.com (@getongab) June 2, 2019

Bitcoin is a currency which
– Can’t be seized
– Supply grows asymptotically, governed by an algorithm
– Transactions are sent over the internet and can’t be blocked
– Is public infrastructure controlled collectively by users— Justin Moon (@_JustinMoon_) June 1, 2019

Bitcoin is a digital asset & form of money. The supply is limited & written into the open source code. Peers, not a central authority, verify what is true on the ledger. This is done by nodes & mining blocks every 10 minutes. This is also the issuance & governance method.— Bruce Fenton (@brucefenton) June 1, 2019

An electronic payment system based on cryptographic proof instead of trust, where the cost savings from lack of mediation decrease transaction costs, reducing the minimum transaction size and enabling small casual transactions.— Matthew Green (@matthew_d_green) June 2, 2019

Means of transferring value to anyone, anywhere, at any time, without a third party, with a public record of the transaction on the blockchain for minimal fees with high security. A decentralized currency with a fixed supply with inflation reduction every 4 years. Store of value.— Jon Cooke {ŁTC} (@JonCooke17) June 1, 2019

History Of Bitcoin

With a relatively short history, Satashi Nakamoto, Blockchain, and Bitcoin have all become household names that push the limits of how we view global currencies.

Just as popular as its origins, Bitcoin has also become notorious for price swings that often make news headlines and grab the attention of financial traders. It has also led to the creation of other digital currency such as EthereumRipple XRPLitecoin. Bitcoin even has other crypto currencies that were created when nodes chose not to upgrade to the latest protocol, creating a new currency out of Bitcoin’s old protocols, such as Bitcoin Cash ABC (BABUSD).

Bitcoin was created in 2009 as the first decentralized currency to run on Blockchain technology.

First mentioned in a white paper that was published by someone with the pen name Satoshi Nakamoto, Bitcoin promised the ability to conduct government-free transactions, relying on digital signatures and digital coins instead of on centralized government-issued fiat currencies. All transactions were kept on a ledger which can be publicly accessed, ensuring transparency.

Miners, the individuals who volunteer their personal computing power to the network to keep it running, are paid for in Bitcoin and have a say in new protocols that are adapted to the blockchain network. This allows them to work as a type of central bank, looking out for the best interest of the digital coin as a collective.

Bitcoin’s decentralized and blockchain protocols require all nodes to verify a transaction. Since these computers are spread across the globe and run by various individuals, it is considered very difficult to hack or corrupt.

This is considered by some to be a secure system and has continuously captured public interest since its creation. There have been times, such as in 2017, when Bitcoin jumped 740% in 5 months, reaching as high as $19,807 before plummeting 69% to $5,967.

Despite Bitcoin being well known amongst traders for its price swings, many believe that this leading digital currency is here to stay.

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