What Is Bitcoin?
Bitcoin is a decentralized digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious and pseudonymous Satoshi Nakamoto.12
The identity of the person or persons who created the technology is
still a mystery. Bitcoin offers the promise of lower transaction fees
than traditional online payment mechanisms do, and unlike
government-issued currencies, it is operated by a decentralized
authority.
Bitcoin is known as a type of cryptocurrency because it uses
cryptography to keep it secure. There are no physical bitcoins, only
balances kept on a public ledger that everyone has transparent access to
(although each record is encrypted). All Bitcoin transactions are
verified by a massive amount of computing power via a process known as
“mining.” Bitcoin is not issued or backed by any banks or governments,
nor is an individual bitcoin valuable as a commodity. Despite it not
being legal tender
in most parts of the world, Bitcoin is very popular and has triggered
the launch of hundreds of other cryptocurrencies, collectively referred
to as altcoins. Bitcoin is commonly abbreviated as BTC when traded.
that is secured by cryptography, which makes it nearly impossible to
counterfeit or double-spend. Many cryptocurrencies are decentralized
networks based on blockchain technology—a distributed ledger
enforced by a disparate network of computers. A defining feature of
cryptocurrencies is that they are generally not issued by any central
authority, rendering them theoretically immune to government
interference or manipulation.