You Need To Know What is Bitcoin?
What is Bitcoin?
Many people think that Bitcoin is a very confusing thing, but Bitcoin is something that is simple to understand.
If asked what is bitcoin (abbreviated BTC), then the simplest explanation is:
Bitcoin is a decentralized global transaction cash system.
Based on a journal written by the discoverer (reported in Bitcoin.org), actually Bitcoin is:
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
Have you ever imagined how the system of transactions (selling, buying, money transfer) occurred?
Yes there is always a third party to mediate, eg: bank (interbank transfer), Visa, Mastercard, Paypal and so forth.
Did you ever buy items on Amazon or Paypal?
What does the payment system overseas look like? Example of using your existing Visa logo credit card, how about the payment going to work?
As we know with every institution of financial service providers (including banks) must have their accounting books. Certainly there is time, energy and expenses to be incurred in order to run the transaction. That’s why we (the customers) are charged extra (charge).
Continuing our initial discussion, what is Bitcoin? Bitcoin replaces and transforms the cashbook system into a global accounting system. Of course the benefits are reducing time and cost.
Who Invented Bitcoin?
There are many people who say that Bitcoin is created by someone, when every great discovery is always done by a group of people (one team).
Bitcoin is discovered by a team or group of people by the name of Satoshi Nakamoto.
Bitcoin system designed by Satoshi is open manner, meaning that programming code can be seen and checked by everyone in the world.
Thus, there are no hidden secrets and the creator has no conflict of interest.
If you are interested to know what kind of programming language or Bitcoin algorithm, then you can research Satoshi Whitepaper.
The 9-page journal explains the mathematics and algorithms of a Bitcoin. You can download the journal material at Bitcoin.org (documentation).
Bitcoin has all the same characteristics as gold, such as:
- The amount of Bitcoin is limited, ie there are only 21,000,000 Bitcoins in the world.
- Bitcoin can be broken down into smaller units without losing the value of the unit (1 Bitcoin = 100,000,000 Satoshi – the smallest unit of Bitcoin, just like grams in Gold). We can buy less than one Bitcoin.
- Bitcoin technology is also stable and will not experience degradation.
- Very difficult to make fake Bitcoin, because of the Blockchain system.
- You can move Bitcoin anywhere in the world in minutes, regardless of the amount of Bitcoin.
That’s why people call Bitcoin a digital gold, but better digital gold. In essence, Bitcoin looks like gold – this is why many people refer to Bitcoin as ‘digital gold’ or ‘Gold 2.0’.
Is Bitcoin Becoming a Digital Currency Revolution?
So, if asked, what is Bitcoin? You can imagine a container (bucket) in which there is a debit card (or credit card), gold and internet.
It’s all so Bitcoin.
The above article is from Luno and curated by my finance editor team by adding some additional information from additional reference sources.
The above article aims as a means of education, not as a suggestion of investing or speculating.