What is Bitcoin (BTC)?

Created in 2009, bitcoin is a decentralized form of currency that allows for peer-to-peer transactions without the need for a middleman such as a bank. The founders of Bitcoin are a mystery, using the pseudonym Satoshi Nakamoto to maintain anonymity. All that is known is that the founding took place in 2008, when Nakamoto released a white paper detailing a way to create a decentralized digital currency. The beauty of Bitcoin lies in its safety and security. Transactions are recorded on a public ledger and verified by a network of computers around the world, making it virtually impossible to manipulate or hack. And unlike traditional currencies, the supply of bitcoin is limited, which means that its value can rise over time as demand increases. Although still a relatively new concept, Bitcoin has already changed the way we think about money and finance.

Resources

White paper

Official website

Bitcoin blockchain explorer

How does Bitcoin (BTC) work?

Bitcoin operates on a decentralized ledger called the blockchain. When a Bitcoin transaction occurs, it’s recorded on the blockchain, which acts as a public ledger that keeps track of all Bitcoin transactions. This allows for total transparency and helps prevent fraud. Additionally, each Bitcoin transaction is verified by a network of computers, making the payment system more secure than ever before. The process may sound complex, but the end result is a currency that’s fast, easy, and secure.

The safety and trustworthiness of Bitcoin lies in the fact that anyone can edit the blockchain. When a block is added to the Bitcoin blockchain, it needs to be verified by most Bitcoin holders, and wallet and transaction encryption codes should match the encryption patterns. These codes are lengthy and random, making it highly unlikely for them to be created fraudulently. The statistical randomness in blockchain verification codes lower the chances of fraudulent transactions in Bitcoin.

What is Bitcoin mining?

Bitcoin is more than just a digital currency. It is a decentralized system that enables individuals to perform and record transactions peer-to-peer without intermediaries like banks. And for these transactions to be validated and recorded on a public ledger, the Bitcoin network relies on a process known as mining. Mining Bitcoin involves solving complex mathematical puzzles using high-powered computers, and this process provides security to the network by verifying transactions and adding new blocks to the blockchain. As a reward for their effort, miners receive newly minted Bitcoins and transaction fees, which incentivizes them to continue the vital work of securing the network. In many ways, Bitcoin mining is the backbone of the Bitcoin economy, ensuring the network’s decentralization, security, and overall health.

What is Bitcoin halving?

One of Bitcoin’s most intriguing aspects is the Bitcoin halving, which takes place every four years. The first Bitcoin halving occurred in November 2012. The next halving was in July 2016, and the most recent halving was in May 2020. This event takes place to control the inflation of Bitcoin, making it a scarce commodity and creating a sense of value in the minds of investors. Essentially, halving is when the block mining reward halves, slashing the number of Bitcoins that miners can create. Experts believe that this event may have an impact on Bitcoin’s price, leading to significant changes in the cryptocurrency market. As we approach the next Bitcoin halving, which is set to occur in 2024, it is essential to keep an eye on the impacts it may have.