What is Bitcoin

With your understanding of cryptocurrencies and blockchain technology, you are ready to move on to learning about the pioneer of crypto. Read on to learn more about Bitcoin!

Bitcoin is the first ever cryptocurrency and was created by Satoshi Nakamoto, a pseudonymous person or team. The technology was outlined in a 2008 white paper and describes how Bitcoin is digital money that allows for secure peer-to-peer transactions.

Thanks to blockchain technology, Bitcoin is decentralized and allows users anywhere in the world to make transactions directly. Every transaction is recorded on the Bitcoin blockchain which is distributed across the network.

In an effort to preserve its value, the number of Bitcoins that can ever be available is capped at 21 million. The result is that Bitcoin cannot be inflated or manipulated by others. Since Bitcoin went live, thousands of new cryptocurrencies have followed behind.

Bitcoin was created in response to the lack of integrity in central institutions. The financial crisis of 2008 was a severe worldwide economic crisis and was the most serious since the Great Depression. Many people were losing trust in the financial authorities.

While the paper by Satoshi Nakamoto was not the first idea for digital money, it provided an elegant solution to the issue of trust. By utilizing pseudonyms, cryptography, and encryption tools, there would be no need to trust the person on the other side of the screen. The technology was there to ensure everything went according to plan.

Satoshi Nakamoto devised a way of combining two concepts, the Bitcoin private key, and the blockchain ledger. A private key is a string of randomized numbers and letters that allow you to control your Bitcoin. Each private key is tracked on the blockchain and can only access the corresponding funds. As such, it is important that you securely store your private key, or else you could lose access to your Bitcoin forever.

People have different goals when it comes to purchasing Bitcoin. This is because Bitcoin is also seen as:

Many people purchase Bitcoin for more than one reason. There is no right or wrong way as it all depends on your investment needs and goals. At the end of the day, you can still benefit from this cryptocurrency. Below you will also find a summary of the difference between a cryptocurrency like Bitcoin and other currencies.

Bitcoin is the first cryptocurrency and was introduced in a white paper in 2008 by Satoshi Nakamoto. It came at a time when the financial crisis was throwing a blanket of doubt on the capabilities of financial institutions. Through Bitcoin, people can utilize a peer-to-peer network and perform transactions without needing a middle party.

You should be able to answer all the questions below. If you are having trouble answering any of them, go back and review the lesson & the external content.