Bitcoin (BTC) is a cryptocurrency created in 2008 by an anonymous person/group of people called Satoshi Nakamoto. The purpose of creating bitcoin was to introduce an online and secure P2P (peer-to-peer) payment method that does not require any intermediaries. Moreover, bitcoin relies on cryptography and blockchain technology that records all bitcoin transactions. If you do not know what blockchain is, click here (What is blockchain?).
Unlike banks or other financial institutions, bitcoin is decentralized, anybody can send bitcoin to the other person without an intermediary bank or government. All bitcoin transactions are tracked on the blockchain, which is similar to a bank's ledger or bank statement. So, actually, every bitcoin transaction is recorded and everyone has access to read whole information about each. Moreover, you do not have to buy 1, 2, 3 and so on bitcoins, you can just buy a fraction. Bitcoin has a limited supply which equals 21 million. That makes bitcoin a deflationary coin because the supply cannot be increased - it is stable. No government, company, or third party controls bitcoin, it’s distributed through the entire network. Everybody can join that.
Who invented Bitcoin?
Actually, nobody knows that. The creator of bitcoin has remained anonymous since 2008 - the year of the creation of the first cryptocurrency. The only thing we know, is that the person or group of people is called Satoshi Nakamoto. Someone who is behind bitcoin published a whitepaper called Bitcoin: A Peer-to-Peer Electronic Cash System in late 2008. You can check the whole document here.
However, bitcoin was not the first concept of digital currency, but it was the first document about this concept which was written in such an elegant way. Satoshi Nakamoto explains in this document the problem of anonymity, lack of inherent weaknesses, or trust issues.
Moreover, the creator of bitcoin introduced a consensus mechanism called proof-of-work (PoW) which regards cryptocurrency mining that will be discussed in the next articles.
The code of bitcoin is excellent and flawless since its first release. It is an uncommon case in modern computer science. Dan Kaminsky, a security researcher who read the bitcoin code, once said that Nakomoto could either be a team of people or a genius”. Moreover, Laszlo Hanyecz, a former bitcoin core developer, had a feeling that the code was too well designed for one person.
After publishing the whitepaper of Bitcoin, Satoshi was connected with the community and regularly tried to explain his masterpiece to everybody. 26th April 2011, was the date when Satoshi sent the last message to the World: I wish you would stop talking about me as a mysterious shadowy figure. The press just turns that into a pirate currency angle. Maybe instead make it about the open-source project and give more credit to your contributors; it helps motivate them”. Satoshi Nakamoto literally disappeared from the Internet after that, nobody knows why and probably no one will ever know. The fascinating fact is that Satoshi has never sent his bitcoins to another wallet. We are not even sure if Satoshi is alive. If he is, he has become one of the wealthiest people in the world, if not the wealthiest.
How to get Bitcoin?
Throughout the entire history of bitcoin, many exchanges, markets, and bitcoin ATMs have been created. Actually, the easiest way to buy bitcoin is to purchase it through an online exchange like Hotbit. We make it easy to provide all services like buying, selling, and transferring bitcoin and other cryptocurrencies. You do not need to hold it yourself and take care of private keys there.
However, if you want to buy bitcoin outside the online exchange, read that carefully:
- Each bitcoin wallet has its public key and private key. The first one is used to send cryptocurrencies, it is like your bank account number or e-mail address. However, a private key, as the name says, should be kept private. It is your password to the wallet, so you do not want to share it with anyone. Moreover, many wallets use seed phrases, also known as the secret recovery phase.
- There are two of the most common types of wallets - hot (online, for example, Metamask, Trust Wallet) and cold (physical, for example, Ledger, Trezor).
- Be aware of choosing the correct chain and make sure many times that the wallet you are sending your cryptos to, is also correct. If it’s not, your bitcoins are lost.
What makes Bitcoin more attractive than cash?
Bitcoin has many advantages that cash does not have. Blockchain technology lets transactions be irreversible. Once a transaction is validated and added to the chain, nobody can reverse that. Due to centralized financial institutions, banking transactions can be reversed. That process is called chargeback. That action may cause various frauds while using credit or debit cards. Secondly, bitcoin makes your transactions private. You do not have to provide any personal information while creating a bitcoin wallet or sending cryptocurrencies. Each transaction is public, everyone can check them on dedicated websites, for instance, blockchain.com. That makes bitcoin impossible to counterfeit or to change the supply of that coin. Moreover, you are free to send bitcoin anywhere and whenever. The recipient may be located on another continent, they would still receive the payment within seconds! The bitcoin network is not closed on weekends as banks usually are. Bitcoin has been existing for 13 years, during this time the network has never been successfully hacked. It is possible, but not feasible. It is called a 51% attack, but we will describe it in the following articles about cryptocurrency mining. Bitcoin transactions are characterized by very low fees comparing it to the amount which is sent. For instance, you can check here details of the transaction worth roughly 50,000 BTC with the fee off 0.000067 BTC.
Fun-facts about Bitcoin
- The first bitcoin transaction, where non-virtual goods were bought, was done by Laszlo Hanyecz, who purchased 2 pizzas for 10,000 BTC in 2010. By the day of writing this article (7th June 2022), these bitcoins are== worth 300,000,000 USD.
- El Salvador, as the first country, on 9 June 2021 adopted bitcoin as a legal tender.
- The market cap of bitcoin in March 2021 was higher than Visa and Mastercard combined.
In bitcoin’s 14-year history of bitcoin, there were many rumors, misconceptions and disbelief in cryptocurrencies and the blockchain industry. On the other hand, more people trust bitcoin and think that it may become the world’s currency because of its safety and ease to use. There are more and more users of cryptocurrencies and it does not seem the trend stops in the following years. Bitcoin gives many possibilities for its users - low transaction fees, impossibility to counterfeit, an investment, and many more… In the following articles, we will describe more topics related to bitcoin, like mining or storing in a wallet.
Peer to peer (p2p) - sending information between two parties without intermediaries.
Proof of Work (PoW) - a consensus mechanism used in cryptocurrency mining.
Satoshi Nakamoto - an anonymous creator of Bitcoin.
Please sign in to leave a comment.