Bitcoin is a consensus network that enables a new system of payment and completely digital money. It is the first decentralized peer-to-peer payment network, that is powered only by users, with no central authority. Bitcoin is a bit like cash for the Internet. However, it is still largely misunderstood.
Who Created Bitcoin?
Bitcoin was the first example of cryptocurrency, which was first described by Wei Dai in the cypherpunks mailing list, in 1998. Dai suggested the idea of a new form of money that would use cryptography to control its creation and transactions, rather than a central authority. Bitcoin’s proof of concept was published in 2009 on a cryptography mailing list by Satoshi Nakamoto. Since then the community has grown, with several alternatives to Bitcoin available, such as Cardano. If you want to learn about Cardano staking click here.
Bitcoin’s protocol and software are published openly and any developer can review the code or make their own modified version.
Who Controls The Bitcoin Network?
Nobody actually owns the Bitcoin network, in the same way, that nobody owns the technology behind email. Bitcoin is in fact controlled by all users of Bitcoin, all over the world. While there are developers who work on improve the software behind Bitcoin and other cryptocurrencies, they are unable to force a change in the Bitcoin protocol, because all the users are free to choose which software and version they use. In order to remain compatible with each other, all users need to use software that complies with the same rules. Bitcoin is only able to work correctly if all users are in agreement. This means that all users and developers have a strong incentive to protect the consensus.
How Does Bitcoin Work?
From a user perspective, Bitcoin is simple a mobile app or computer program that provides a Bitcoin wallet for personal use, that allows a user to send and receive bitcoins. This how Bitcoin works for the majority of users.
The Bitcoin network is sharing a public ledger known as the block chain. This ledger contains every single transaction ever processed, which allows the user’s computer to verify how valid each translation each. Each transaction’s authenticity is protected by digital signatures which correspond to the sending addresses. This means all users have full control over sending Bitcoins from their own Bitcoin address.
Anyone is able to process transactions using the specialized hardware, and earn a reward in bitcoins for doing this. This is called mining.
Do People Really Use Bitcoin?
Yes! A growing number of businesses and individuals use Bitcoin. This includes brick and mortar businesses, including law firms, apartments, and restaurants, as well as the online services that you might expect to embrace cryptocurrency. Bitcoin is still a relatively new phenomenon that many people still know little about, but it is growing in popularity very quickly. As of May 2018, the total value of all existing bitcoins was over $100billion. Millions of dollars worth of bitcoins are exchanged every day.
Be safe out there.
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