Bitcoin (₿) is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and was released as open-source software in 2009. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
WHAT IS SATOSHI?
Bitcoin, the world’s first cryptocurrency, has a unit called “Satoshi”. A Satoshi is the smallest unit of Bitcoin. It is named after Satoshi Nakamoto, the creator of Bitcoin. Each BTC is divisible until the 1/10^8 part. A unit of Satoshi is equal to 0.00000001 bitcoin. Since Bitcoin’s inception, it has only ever had two official units- Bitcoin and Satoshi. In 2015, Bitcoin was included under ISO 4217 which does standardization for currencies.
A Bitcoin wallet is a software program where Bitcoins are stored. To be technically accurate, Bitcoins are not stored anywhere; there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Bitcoin wallets facilitate sending and receiving Bitcoins and gives ownership of the Bitcoin balance to the user. The Bitcoin wallet comes in many forms; desktop, mobile, web and hardware are the four main types of wallets.
BENEFITS OF BITCOIN
Bitcoin is permissionless:Traditional currencies and forms of money require permission to use (from banks, financial institutions, governments). Bitcoin requires no permission from anyone and is free and open to use globally. There are no borders or limits with Bitcoin.
Bitcoin is immune to seizure: Nobody can confiscate your Bitcoin since you own it; it’s not housed at any central bank or company. You can be your own bank with Bitcoin.
Bitcoin is censorship resistant: Using a computational algorithm called proof-of-work (PoW), no one is able to block or censor your transactions.
Bitcoin is decentralized: The network is distributed globally among many thousands of nodes (computers) and millions of users where you don’t have to rely on trusted third-parties.
Bitcoin has a limited supply: There will only ever be 21 million bitcoins created and are generated at a predictable rate. Bitcoin is scarce and deflationary.
Bitcoin is open source: Anyone can contribute to developing Bitcoin in a myriad of areas including different Bitcoin software clients.
Bitcoin is fast and easy to use:since Bitcoin is a digital peer-to-peer currency as outlined in the original Satoshi Nakamoto whitepaper, transactions are near instant and are very low-cost, much less than central payment networks such as PayPal, Visa or Mastercard.
Bitcoin is a push system:With Bitcoin, there is no risk of charge-backs because once Bitcoin are sent, the transaction cannot be reversed. Bitcoin is akin to cash — once you give someone cash, you cannot get it back (unless they give it back to you).
Bitcoin is real money: Bitcoin is used around the world to pay for things such as coffee, food, electronics, travel, and more. Some even like to call it magical internet money because of all it’s amazing properties and it’s ability to not be double-spent.
Bitcoin is provides anonymity: If used correctly, Bitcoin can be used as an anonymous currency free from spying governments. When you use Bitcoin, you don’t need to provide your email, name, social security number, or any other identifying information when making peer-to-peer Bitcoin transactions. Bitcoin is just numbers, 1’s and 0’s, traveling through the internet. If not used correctly though, Bitcoin can just be psuedo-anonymous providing people with a lot more privacy than using traditional currencies.
Bitcoin is freedom: using Bitcoin gives you the financial freedom to transact globally using all the properties mentioned above. As such, Bitcoin provides economic stability and newfound freedoms to the world, which are life changing events.