What is a Bitcoin? Cryptocurrency? It's a decentralized digital currency

What is Bitcoin? What is CryptoCurrency?

Bitcoin is an innovative payment network and a new kind of money.

Bitcoin uses peer-to-peer technology to operate with no central authority or banks; 

managing transactions and the issuing of bitcoins is carried out collectively by the network.

 Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.

Bitcoin is a crypto-coin or Crypto-Currency and a digital payment system: invented by an unknown programmer or a group of programmers under the name Satoshi Nakamoto. It was released as open source software in 2009.

The system is peer-to-peer, and transactions are performed directly between users without the intermediary. 4 These operations are confirmed by the nodes of the network and recorded in a distributed public register called the block string. Since the system works without a central workshop or a single administrator, called Bitcoin the first decentralized digital currency.

What is a Bitcoin? Cryptocurrency? It's a decentralized digital currency

In addition to being created as a reward for mining, Bitcoin can be exchanged for other currencies, products and services in the legal and black markets.

From February here to 2015 accepted more than 100,000 merchants and payment of vendors. According to research conducted by the University of Cambridge in 2017, there are 2.9 to 5.8 million unique users using a crypto-coin purse, most of them using Bitcoin .

Bitcoin is form of Digital Currency

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

It’s the first example of a growing category of money known as cryptocurrency.

What makes Bitcoin different from normal currencies?

Bitcoin can be used to buy things electronically. In this sense, it is classic in dollars, euros or yen, which is also traded numerically.


But Bitcoins main features and what makes it different from the classic money is that it is decentralized. No institution controls the Bitcoin network. This puts people at ease because it means that a big bank can not manage their money.

Who created Bitcoin?

What is a Bitcoin? Cryptocurrency? It's a decentralized digital currency

A software developer named Satoshi Nakamoto suggested Bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce an independent currency of any central authority can be transferred electronically, more or less immediately, with very low transaction costs.

Who prints Bitcoin?

No. This currency is not physically printed in the shadow of a central bank, irresponsible to the people and self-regulation. These banks can simply produce more money to cover the national debt, thus devaluing their currency.

Instead, the new digital Bitcoin, a community of people who all can participate in Bitcoins. Are "extracted" using the computing power in a distributed network.


This network also has transactions with virtual currency, which Bitcoin its own payment network.

So you can’t churn out unlimited bitcoins?

That is true. Bitcoin protocol - the rules that make Bitcoin work - says that only 21 million Bitcoins can ever created by minors. However, these pieces are divided into smaller parts (the smallest amount is divisible by one hundred millionth of a bitcoin is called a "Satoshi", the founder of Bitcoin).

What is bitcoin based on?

What is a Bitcoin? Cryptocurrency? It's a decentralized digital currency

Conventional currency was based on gold or silver. In theory, did you know that if you dropped an American dollar at the bank, you could get a little gold back (but not actually worked in practice). But Bitcoin does not rest on gold; It is based on mathematics.


All over the world, people use software that follows a mathematical formula to produce Bitcoins. The mathematical formula is available for free everybody can check it out.


The software is open source, which means that everyone can look to make sure that it does what it takes.

Definition of Bitcoin

What are Bitcoin characteristics?

Bitcoin has several important features that set it apart from government-backed currencies.

1. It's decentralized - Bitcoin

Bitcoin network is not controlled by a central authority. Every machine that mines and processes Bitcoin transactions are part of the network and machines to work together. This means that a central authority in theory can not tinker with monetary policy and cause degradation - or just decide to remove them by the European Central Bank of Bitcoins of people decided to do so in Cyprus in early 2013 And if part of the network is taken offline for any reason, the money continues to flow.

2. It's easy to set up - Bitcoin

Conventional banks you get to jump through hoops just to open a bank account. Creating vendor accounts is another Kafkaesque task obsessed bureaucracy. However, you can create a Bitcoin address in seconds, without asking questions, and no fees.

3. It's anonymous - Bitcoin

Well, somehow. Users can retain more Bitcoin addresses, and they are not related to names, addresses or other personal information. However ...

4. It's completely transparent - Bitcoin

Bitcoin holds the details of each transaction that has ever arrived in the network in a large version of a general storbog, called the block string. Block string says it all.

If you have a publicly used Bitcoin address, everyone can tell how many Bitcoins are stored at the address. They do not know it's yours.


There are steps that people can take to make their networking activities more opaque Bitcoin even when they do not use the same consistent Bitcoin addresses and do not transfer much Bitcoin to a single address.

5. Transaction fees are miniscule - Bitcoin

Your bank may charge you a £10 fee for international transfers. Bitcoin doesn’t.

6. It’s fast - Bitcoin

You can send money everywhere, and it will get minutes later, once the Bitcoin network processes the payment.

7. It’s non-repudiable - Bitcoin

When your Bitcoins are sent, there is no retrieving them, unless the recipient returns them to you. They left forever.


Thus, Bitcoin has much to do in theory. But how does it work in practice? Read on to find out how Bitcoins are used, what happens when there is a Bitcoin transaction and how the network keeps track of everything.