What is Bitcoin?
Bitcoin was the first significant cryptocurrency created. This digital currency was developed anonymously by Satoshi Nakamoto (pseudonym). Bitcoin is a digital currency that allows anyone to store, send and receive BTC from a Bitcoin wallet.
Bitcoin uses a decentralized public ledger known as the blockchain to keep track of all accounts and balances.
Users can send funds by writing transactions to the blockchain when using a Bitcoin wallet. Those transactions are sent to miners with fees to pay the miners, who will verify the transaction to be added to the public ledger, making the transaction complete.
What are the core features of Bitcoin?
- Decentralization: Bitcoin is decentralized, which means that it operates without a central authority or intermediary such as a bank or government. Transactions are verified and recorded by a network of users, making them highly resistant to censorship and manipulation.
- Blockchain Technology: Bitcoin uses a distributed ledger technology called the blockchain. The blockchain is a public ledger that records all transactions on the network. Each block on the chain contains a record of several transactions, and once a block is added to the chain, it cannot be altered or deleted.
- Limited Supply: Bitcoin has a limited supply of 21 million coins that can ever be mined. This ensures that Bitcoin is a deflationary currency, and its value is not subject to inflationary pressures that can erode the value of traditional fiat currencies.
- Pseudonymity: Bitcoin transactions are pseudonymous, meaning users can send and receive Bitcoins without revealing their real identities. However, all transactions are recorded on the public blockchain, which means that transactions can be traced back to their source.
- Mining: Bitcoin mining is the process by which new bitcoins are created, and transactions are verified. Miners compete to solve complex mathematical problems, and the first miner to solve the problem is rewarded with newly minted bitcoins.
- Security: Bitcoin uses cryptographic techniques to secure its network and transactions. Each user has a public and private key, which are used to verify transactions and ensure the integrity of the network.
What is the native token of Bitcoin?
The native token of the Bitcoin network is called Bitcoin, commonly represented by the symbol BTC. BTC is the original and most well-known cryptocurrency. BTC is used as a digital currency for peer-to-peer transactions, with no need for a centralized intermediary like a bank or financial institution. Instead, transactions on the Bitcoin network are verified and recorded on a decentralized ledger called the blockchain, which is maintained by a network of users and nodes around the world. BTC is also used as a store of value and an investment asset, with many people holding BTC as a long-term investment or as a hedge against inflation and economic uncertainty. BTC has a limited supply, with a maximum of 21 million BTC that can ever exist, which makes it a scarce asset that may increase in value over time.