What is Bitcoin?
Bitcoin was created to be a secure, non-regulated, decentralized alternative currency, or ‘altcoin,’ with the important benefit of user anonymity. It is essentially a new way for people and organizations to trade funds. Bitcoin has been pervading the headlines more and more each day and is only growing in popularity and usefulness.
History of Bitcoin
In November of 2008, a design paper was published online entitled ‘Bitcoin: A Peer-To-Peer Electronic Cash System,’ under the pseudonym ‘Satoshi Nakamoto,’ outlining the new alternative currency model. To date, no one is certain of Nakamoto’s identity, but theories abound, from Nakamoto being an individual cryptographer or game developer to the possibility of Nakamoto as a computer collective.
How does it work?
Bitcoins cannot be created or destroyed, and are brought into circulation through a process known as ‘mining.’ The firstBitcoin block, known as the ‘Genesis Block’ was mined in 2009.
Bitcoin transactions are kept on a shared public ledger known as the block chain. ‘Miners’ assist in the processing of transactions (known as blocks) on the block chainand are rewarded with a certain number of the newly issued (or ‘mined’) Bitcoins. Anyone can access the block chain, which helps ensure that Bitcoins are being mined and transactions are being processed correctly.
Bitcoin transactions take place on virtual markets known as exchanges and are stored by users in unique ‘wallets,’ which contain private keys that allow users to prove ownership of their Bitcoins and protect themselves against duel transactions.