What is Bitcoin? A Simple Guide For Beginners!
05 January 2021
Bitcoin is the world’s leading cryptocurrency. It is regarded as a store of value, investment, and a digital currency, depending on its usage. Bitcoin was created by a mysterious Satoshi Nakamoto back in 2008. In his white paper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, he describes Bitcoin as ‘A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending.’
Bitcoin gives users full access and ownership over their funds. It is protected by cryptography techniques and requires private and public keys to validate a transaction.
Every Bitcoin transaction is recorded on the Bitcoin blockchain. Just like any other blockchain, the Bitcoin blockchain is based on multi-nodal operation ie., copies of transactions and data are sent across every node involved, and an immutable system - the data recorded cannot be altered.
In honor of the creator, the lowest value of Bitcoin is called a satoshi. Hence, 1 Bitcoin = 100,000,000 satoshis.
As a means of currency, Bitcoins can be used to purchase any item both online and offline. Institutions have started adopting bitcoin as a primary payment option.
As a means of investment option, Bitcoins are being actively traded by crypto traders on cryptocurrency exchanges. They are held with the hopes of an increase in value as time progresses. Its value is based on use-cases and adoption. Thus it creates more demand amidst a short supply, driving the value high.
Bitcoin, being an open-source protocol, is analyzed by thousands of programmers all over the world, and their constant productive suggestions aim to enhance the quality of the platform devoid of any loopholes.