What is Bitcoin?
How many here have heard of bitcoin?
Almost all present have their hands up.
How many here know exactly what bitcoin is?
The number of hands still up are now fewer than half.
This is the usual scenario when a group of people are asked this question. Many people have heard of bitcoin, but not many know exactly what it is, or even more importantly, are aware of its development and applications in the real world today. So what is bitcoin?
Bitcoin is simple to define, yet hard to explain.
BITCOIN is the world’s first digital currency which saw its first transaction on 3rd January 2009. As an open-source software. Bitcoin introduces a revolutionary method of payment on a peer-to-peer network which does not involve any banks or governing authority. All transactions are verified by computer servers scattered around the world, and bitcoin move from one individual or entity to another across international borders in a matter of seconds. Unlike banks, Bitcoin as a payment system also functions 24 hours a day, 7 days a week, 365 days a year, and at rates far below those charged by banks and remittance companies, making them a viable method of payment and transaction. What defines bitcoin and how it works can be summarised in the following video.
Who Created Bitcoin?
BITCOIN was invented by an unknown person who went under the pseudonym Satoshi Nakamoto. Some people believe that Satoshi Nakamoto is neither Japanese nor one particular individual, but possibly a group of like-minded programmers who saw the need for a decentralized cryptocurrency for public worldwide use. The identity of Satoshi Nakamoto has often been speculated, with some claiming to be the person, but these are unverified and claims of Satoshi often disappear into silence. Still, the function of Bitcoin does not require or rely on the true identity of Satoshi to be known, in very much the same way as we never really need to know who invented money to use money in the real world. But knowing why Satoshi invented it is important. Satoshi had published the white paper on the Bitcoin Protocol on the mailing list of The Cryptography and Cryptography Policy in October 2008, with the following remark:
I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party. The paper is available at: http://www.bitcoin.org/bitcoin.pdf. The main properties are:
- Double-spending is prevented with a peer-to-peer network.
- No mint or other trusted parties.
- Participants can be anonymous.
- New coins are made from Hashcash style proof-of-work. The proof-of-work for new coin generation also powers the network to prevent double spending.
– Satoshi Nakamoto, 01 November 2008
How Bitcoin Works
For more educational videos on the topic, go to Videos at the top menu of this site.