What is Bitcoin
Bitcoin is an innovative, digital currency and payment network which was introduced in 2009 by a person who was using the pseudonym Satoshi Nakamoto. He offered this idea to the world as an open-source.
Bitcoin is completely different from regular, conventional currencies. It’s therefore necessary to familiarize yourself with its key features, which are:
- Full decentralization. Bitcoins are issued and governed without any central authority, which means, that there’s no central government, company or bank that could have any control over this currency. It’s therefore completely impossible to counterfeit the currency, block accounts, control cash flows or cause inflation. There is no central point of control, or nobody else who could control the bitcoin network.
- Bitcoins are programmed by special software in such a way that new coins are issued at a stable, yet constantly decreasing rate. The number of bitcoins in circulation should finally reach 21 million by 2140.
- Bitcoin transactions are free or with minimum payment fees.
- Unlike most other currencies, the bitcoin doesn’t rely on trust in its issuer, or its mediator (bank, country, etc.). Transactions take place via a distributed database across peer-to-peer network bundles.
- You can send and receive any amount of money anywhere and with anyone all over the world.
- Bitcoins can be stored on a PC in a wallet file or on special hardware. They can also be stored using the third party services. It’s also possible to keep the wallet entirely off-line (a paper wallet).
- Each bitcoin is divisible up to 8 decimal places, producing a large number of smaller units. The smallest unit of the bitcoin, the Satoshi, is therefore 0.000 000 01 BTC. If this unit still wasn’t small enough, the decimal point could be moved, but the final amount of bitcoins remains the same.
The video explains how the bitcoin currency works
Bitcoin Foundation, which promotes and protects the bitcoin infrastructure, was established in 2012. Its real role is to monitor for any potential threats and try to improve the bitcoin source code. It holds conferences and propagates the currency. Due to the fact of the decentralization of the network, this foundation wields no real authority.