What is Bitcoin? (BTC)

If you do not know what Bitcoin (BTC) is, then this cryptopedia guide is the right one for you. We are sure you have heard over the last years about Bitcoin but you are not sure how it works, what it is or how to even buy it. In this guide, you are going to have all the necessary information about what Bitcoin is, and more. 

What is Bitcoin? #

Bitcoin (BTC) is the largest cryptocurrency in the world. It is the first digital asset that you can own and nobody else can. If you own BTC, nobody else can have the same BTC you have. With this in mind, comes a very important notion created by Bitcoin: digital scarcity. 

Nowadays, we can buy credits on different platforms or gift cards to use on a wide range of sites. However, these digitally-based points and credits are not scarce. The company that issues them could certainly create more without even telling people about it. Similarly, we have fiat currencies such as the U.S. dollar (USD), the Euro (EUR) or the South African Rand (ZAR), that can be issued without limits by politicians. Bitcoin, instead, has a limited supply of 21 million BTC that will never be expanded. It is impossible to do it. This is why it is so important. 

Bitcoin can be considered the internet of monetary policy. When we use the internet, we realize that there is no centralized authority controlling what we do or how. Although it can be blocked and restricted, it cannot be shut down or destroyed. The internet works as a decentralized network of computers and users that interact one with another. This is one of the reasons why we feel free using the internet. No matter where we are, we can send a message to a friend located in the other part of the world. Everything without relying on a centralized party. 

Bitcoin works in the same way but in the monetary policy world. We can use BTC in a decentralized manner. We can send and receive BTC no matter where we are. We only need an internet connection that would allow us to do so in just a few seconds. 

Bitcoin relies on a decentralized network of miners and nodes that process transactions and control the network. In this way, we are able to reduce our dependence on centralized financial companies such as banks.

Nobody is going to be stopping our transaction from going through once we press the send button. Instead, when we use traditional financial solutions, we do not know if the funds will be transferred or not. We are subject to the decision of a third party that controls our funds. 

Why Was Bitcoin Created? #

For many years, libertarians and programmers searched for a solution on how to avoid using the centralized financial system. This is why they were able to create Bitcoin. The name of the founder of Bitcoin is Satoshi Nakamoto (this is a pseudonymous he/they use). But nobody knows who the real creator of Bitcoin really is. 

Presented at the end of 2008 and launched in early 2009, Bitcoin represented a clear change to the traditional financial system. It is also worth remembering that in 2008 and 2009, the world experienced the largest financial crisis since 1930. 

Since that moment, the network hasn’t stopped growing. Nowadays, the valuation of the BTC in circulation is larger than most of the largest banks in the world. This shows how far Bitcoin was able to go in the last decade. 

Bitcoin has reached new all-time highs in 2020. 2021 could bring new opportunities for investors and traders that decide to invest in the largest cryptocurrency in the world. 

Bitcoin Facts #

If you want to know what Bitcoin is, you can follow these bullet points that it will help you understand it:

  • There are 21 million BTC
  • BTC supply is fixed and this cannot be changed
  • Is digitally scarce
  • There are fewer millionaires in the world than BTC available 
  • It was created during the financial crisis of 2008/2009
  • The creator of BTC is unknown (but goes by the name of Satoshi Nakamoto)
  • It is now the largest cryptocurrency in the world
  • It is based on Blockchain technology
  • BTC is now larger than most of the largest banks in the world

If you want to know more about Bitcoin and cryptocurrencies, don’t hesitate to check our crypto university courses.

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