Bitcoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.
The original Bitcoin software by Satoshi Nakamoto was released under the MIT license. Most client software, derived or “from scratch”, also uses open source licensing.
Bitcoin is one of the first successful implementations of a distributed crypto-currency, described in part in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.
Bitcoin is produced and has processes and safeguards in place to prevent fraud and ensure appreciation in its value. The main building blocks of Bitcoin are blockchain, mining, hashes, halving, keys, and wallets.
Bitcoin miners run complex computer rigs to solve complicated puzzles in an effort to confirm groups of transactions called blocks. Upon success, these blocks are added to the blockchain record, and the miners are rewarded with a small number of bitcoins.
Other participants in the Bitcoin market can buy or sell tokens through cryptocurrency exchanges or peer-to-peer.
The Bitcoin ledger is protected against fraud via a trustless system; Bitcoin exchanges also work to defend themselves against potential theft, although high-profile thefts have occurred.
- Bitcoins are sent easily through the Internet, without needing to trust any third party.
- Transactions:
- Are irreversible by design
- Are fast. Funds eived are available for spending within minutes.
- Cost very little, especially compared to other payment networks.
- The supply of bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) to miners who help secure the network.
- Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments.
