What is Bitcoin? (part 2)

Bitcoin

Bitcoin (BTC for short) is a digital currency that is created (mined) and stored electronically. Unlike euros or US dollars, bitcoins are not physically printed or generated by central banks, but are calculated decentrally by many people around the world with computer power.

What is Bitcoin?

Bitcoin (BTC) is a digital currency that is created (mined) and stored electronically. Unlike euros or US dollars, bitcoins are not physically printed and are therefore not issued by a central authority, but are mined decentrally by many people around the world using complex computing processes. Bitcoin is therefore a decentralized, censorship-resistant, digital currency.

What is Bitcoin based on?

The technology underlying Bitcoin is known as blockchain (we explain blockchain here). Decisions in the Bitcoin network are made via a consensus mechanism (proof of work) defined in the program code and not by a centralized authority. The software is so-called open-source software, which means that it is possible for anyone to understand what this software does and whether it serves its purpose. In addition, everyone on the blockchain can understand how many Bitcoins there are, which address has how many Bitcoins and which transactions are made.

How does Bitcoin (BTC) work?

The decentralized structure of Bitcoin means that all transactions are transparent. To become part of the Bitcoin network, you need a Bitcoin wallet. Such a wallet is uniquely identifiable by a pair of cryptographic keys (“private key” and “public key”). Anyone with internet access can use a bitcoin wallet. The private key acts as a kind of password to manage the bitcoin on the blockchain and should therefore be kept safe, preferably offline. The public key serves as a public address, much like an email address, to which bitcoins can be sent. The public key can also be used to see which transactions have been made by a Bitcoin wallet. You can also see how many bitcoins are on the address. However, to which person the address belongs cannot be identified.

Who Invented Bitcoin (BTC)?

Bitcoin was created by a single person or group of software developers using the pseudonym Satoshi Nakamoto. It is still unclear who exactly invented Bitcoin.

How many Bitcoin (BTC) are there?

The Bitcoin protocol limits the amount of supply miners can mine to 21 million units. Bitcoin that can be divided up to a hundred millionth is called Satoshi - named after the Bitcoin inventor Satoshi Nakamoto.