An Introduction To The World Of Bitcoin
Bitcoin is a digital currency, or more specifically a cryptocurrency, that has been revolutionizing the way we think about money for nearly a decade. It was first launched in January of 2009 as a peer-to-peer electronic cash system. The software was released as open source by Satoshi Nakamoto after which the first unit of the currency was mined. The true identity of Satoshi Nakamoto is still unknown, but his work has made an impact across the globe.
Exactly What Is Bitcoin?
At its core, Bitcoin is a currency that has the potential to function as any other currency. That means if a vendor accepts the currency, then it can be used to purchase goods or services. At the original time of creation, Bitcoin was not accepted by any vendors. Today; however, it has grown tremendously in terms of popularity and a number of big-name vendors now accept the currency.
There are a number of factors that make Bitcoin very different from any other form of currency that came before it. The fact that it is entirely digital is the least significant of those differences, albeit still an important factor. The most important difference between Bitcoin and previous currencies is that it is decentralized.
A decentralized currency is one that does not rely on central banks, organizations, or governments to control and manage the currency. The funds are controlled entirely by the people who use them. This is accomplished through the use of a massive ledger, which is owned by each person who uses Bitcoin. Each and every transaction made using Bitcoin is recorded to this ledger.
The ledger, referred to as a blockchain, consists of a number of blocks in which transactions are recorded. These blocks are maintained and verified by the people who use Bitcoin software. This eliminates the need for any single organization or government to manage the currency.
Advantages Of Decentralization
The creator of Bitcoin stated that traditional currencies were flawed because they required a significant amount of trust to work. The people must trust the banks to handle currencies and not debase them. Yet, throughout history, the trust of the people has been violated countless times by banks. A decentralized currency does not rely on this same trust.
There are a host of other benefits that come from decentralizing a currency, such as increased security, the stabilization of economies, and the ability to make transactions more affordable. More consumers and more businesses than ever are beginning to realize just how significant these benefits are and they are making moves to acquire more Bitcoin.