What is Bitcoin? (Who created Bitcoin)

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Bitcoin turned into created via way of means of Satoshi Nakamoto, a pseudonymous man or woman or crew who mentioned the technology in a 2008 white paper. It’s a charmingly easy concept: Bitcoin is a virtual forex that lets in for steady peer-to-peer transactions over the Internet.

  • Unlike services like Venmo and PayPal, which rely on the traditional financial system for permission to transfer money and on existing debit/credit accounts, bitcoin is decentralized: any two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government, or other institution.
  • Every transaction involving Bitcoin is tracked on the blockchain, which is similar to a bank’s ledger, or log of customers’ funds going in and out of the bank. In simple terms, it’s a record of every transaction ever made using bitcoin.
  • Unlike a bank’s ledger, the Bitcoin blockchain is distributed across the entire network. No company, country, or third party is in control of it; and anyone can become part of that network.
  • There will only ever be 21 million bitcoin. This is digital money that cannot be inflated or manipulated in any way.
  • It isn’t necessary to buy an entire bitcoin: you can buy just a fraction of one if that’s all you want or need.

Bitcoin Basics

Since the creation of Bitcoin, thousands of new cryptocurrencies have been launched, but Bitcoin (BTC for short) is the largest in terms of market capitalization and trading volume.

Who created Bitcoin?

To understand how Bitcoin works, it helps to start at the beginning. The question of who created Bitcoin is an interesting one, because a decade after the technology was invented and despite much digging by journalists and members of the crypto community, its creator remains anonymous.

When Bitcoin first appeared, it marked a major advance in computer science.

Because it solved a fundamental problem of commerce on the Internet: How do you transfer value between two people without a trusted intermediary (like a bank) in between? By solving this problem, the invention of Bitcoin has far-reaching implications: as a currency designed for the Internet, it can be used across borders and finance without involving banks, credit card companies, lenders, and all over the world. Allows transactions. Even governments. When any two people—wherever they live—can send payments to each other without encountering these gatekeepers, it creates the possibility of an open financial system that is more efficient, more free, and more innovative. This, in a nutshell, is Bitcoin defined.

How Bitcoin works

Unlike credit card networks like Visa and payment processors like PayPal, Bitcoin is not owned by an individual or company. Bitcoin is the world’s first fully open payment network that anyone with an internet connection can participate in. Bitcoin was designed to be used over the Internet, and does not rely on banks or private companies to process transactions.

One of the most important elements of Bitcoin is the blockchain, which tracks who owns what, much like a bank tracks assets. What separates the Bitcoin blockchain from a bank’s ledger is that it is decentralized, meaning anyone can see it and no single entity controls it.

Here are some details on how it all works:

Cryptocurrencies and traditional currencies share some traits—like how you can use them to buy things or how you can transfer them electronically—but they also differ in interesting ways. Here are a few highlights.

How to get Bitcoin

The easiest way to buy Bitcoin is to buy it through an online exchange like Coinbase. Coinbase makes it easy to buy, sell, send, receive and store Bitcoin using something called public and private keys.

  1. Each person who joins the bitcoin network is issued a public key, which is a long string of letters and numbers that you can think of like an email address, and a private key, which is equivalent to a password.
  2. When you buy bitcoin—or send/receive it—you get a public key, which you can think of as a key that unlocks a virtual vault and gives you access to your money.
  3. Anyone can send bitcoin to you via your public key, but only the holder of the private key can access the bitcoin in the “virtual vault” once it’s been sent.
  4. There are many ways to store bitcoin both online and off. The simplest solution is a virtual wallet.
  5. If you want to transfer money from your wallet to a bank account after selling your bitcoin, the Coinbase app makes it as easy as transferring funds from one bank to another. Similar to conventional bank transfers or ATM withdrawals, exchanges like Coinbase set a daily limit, and it may take between a few days and a week for the transaction to be completed.

Where does Bitcoin come from?

Bitcoin is virtually ‘mined’ by a vast, decentralized (also known as ‘peer-to-peer’) network of computers that are constantly verifying and protecting the validity of the blockchain. . Each bitcoin transaction appears on this ledger, with new information periodically collected into a “block”, which is added to all previous blocks.