What is Bitcoin?

What is Bitcoin? If you are looking to learn more about Bitcoin and it's ecosystem, this is a great place to begin. In this post, we'll go over the basics of Bitcoin, the world's #1 cryptocurrency.

The Basics of Bitcoin

Bitcoin, with a capital B, is the world's first digital currency without a central bank or administrator. This makes Bitcoin a decentralized currency; which means it is not controlled by a central authority. This type of digital currency can also be referred to as cryptocurrency. Cryptocurrency, like Bitcoin, is digital and only exists online. You cannot touch bitcoin or physically withdraw bitcoin from a bank like fiat money, bills, coins or gold. You can however, own bitcoin, trade bitcoin and sell bitcoin. The ownership rights to bitcoin are maintained 100% online in the Bitcoin blockchain. We'll cover blockchain in another post, let us first continue to cover the basics here!

Next, there is bitcoin, with a lowercase b, this is representative of Bitcoin's native cryptocurrency coin, BTC. BTC is also known as the native asset of the Bitcoin blockchain. BTC can be thought of as the stock or equity symbol for bitcoin in the cryptocurrency world. The monetary value of a single bitcoin changes 24/7, similar to the price of a stock or bond. In late 2021, the value of one bitcoin had surpassed $68,000. Bitcoin is often referred to as a digital form of gold due to its ideal store-of-value properties.

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Who Controls Bitcoin?

This is the beauty of Bitcoin and the blockchain network. Bitcoin is the first decentralized cryptocurrency that is not controlled by any governmental entity! As central banks control the money supply for an economy, like in the United States, and there are third parties like banks and credit card companies that verify transactions and transfer funds between accounts, Bitcoin is quite the opposite! Bitcoin and the underlying blockchain is available online, is 100% public and it alone acts to verify all of the transactions and movement of bitcoin on the network!

One of the biggest and most significant difference between fiat money and bitcoin is that bitcoin has a limited supply of 21 million coins; forever. As fiat money, controlled by a central government, can continue to print more bills, the supply of bitcoin is fixed and no additional coins above the 21 million supply cap can ever exist. This is by design in the underlying code of the Bitcoin blockchain. The Bitcoin ecosystem is supply and demand at its finest. This is why the value of one single bitcoin has become so valuable, the supply is capped, making them scarce.

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Who Created Bitcoin?

Bitcoin was created by an individual who went by the online alias Satoshi Nakamoto. No one has ever been able to determine who Satoshi is (or was), it's fascinating! We only know that Satoshi Nakamoto was deeply involved with developing the code behind Bitcoin, published the white paper on Bitcoin and the underlying Blockchain and got the network off the ground. The white paper published by Satoshi Nakamoto in 2008 was titled "Bitcoin: A Peer-to-Peer Electronic Cash System". On January 9, 2009 the first 50 bitcoin were created through what is known as cryptocurrency mining.

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How do you use Bitcoin?

All of the transactions associated with bitcoin happen over the internet. Bitcoin is purchased, transferred and stored into and out of digital wallets. These digital wallets are all unique and the transactions and bitcoin associated with each of them is stored in the Bitcoin blockchain. The "key", or ownership of every wallet, is also unique and this is how one gains access to the funds associated to the respective digital wallet. Therefore, securing your cryptocurrency wallet keys and ensuring they are never left to prying eyes or can be stolen is an extremely important aspect of owning any cryptocurrency. If one loses their wallet key, the bitcoin stored and associated to that wallet is also lost forever.

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