What is Bitcoin?
"What is Bitcoin?" - this question is still faced by the majority of our planet's population. Therefore, in this article we will try to explain the specifications of this digital asset and the ideas that brought it to life.
Bitcoin is an innovative currency of the information age, also known as the gold of the Internet. Bitcoin (BTC for short) is a decentralized currency, i.e. without a central issuing institution, independent of banks, governments and other organizations intermediating in its exchange. It is a currency that knows no borders, available wherever the Internet (or a cellular network) is available. Bitcoin is a currency that you can instantly send to anywhere in the world, bypassing banks and intermediaries, and thus:
Because some of its functions, such as Electronic money or a means of storing value have already been described many times, this time we will try to look inside and at the same time the foundations of the idea of Bitcoin to provide the fullest answer to the question "what is Bitcoin?".
Bitcoin is information
Information that anyone can access and can be verified by everyone. In addition, Bitcoin has open source code, so that anyone can see how it works at any time. Of course, this requires knowledge of information technology.
Bitcoin is a network
BTC is the currency of the internet and it works thanks to the P2P network (i.e. one where all users have equal rights). Nobody controls or overrides the Bitcoin network. This infrastructure does not have a general manager or superior owner who would directly profit from its functioning. Bitcoin is a digital currency held by a community where everyone has the same rights and privileges. Thanks to this, despite the anonymity of each member of the network separately, all activities are fully transparent and visible to other participants "at a glance".
Any changes made to the bitcoin protocol must be democratically approved by an appropriate number of network users. The very creator of Bitcoin - Satoshi Nakamoto - would have little to say about the changes to the protocol at present if the community did not support his ideas. This eliminates the worry that someone will ever be able to block or appropriate our Bitcoins, as long as we follow basic internet security rules.
How can we be sure?
Bitcoin is based on math and cryptography. Its code prevents artificial printing, blocking or counterfeiting of cryptocurrencies. With basic security measures in place, your bitcoins cannot be confiscated by "force majeure" (eg government, bank, bailiff, spouse in divorce, etc.). Therefore, Bitcoin provides you with a 100% ownership guarantee for your money.
Bitcoin is a limited currency. Unlike banknotes, which don't really know how much is in circulation, only 21 million bitcoins can be created. As of the day of writing this article, 17,781,425 bitcoins are in circulation, or 85% of all available stock. You can check the current amount of bitcoins in circulation, among others on the coinpaprika website under "available resources". Limited supply makes it an asset resistant to inflation. BTC is also a currency that is divisible to 8 decimal places, thanks to which, regardless of what the price of bitcoin will be in a few years, it will still be able to pay with it, e.g. for coffee or everyday purchases.
Bitcoin is an anonymous and fully transparent currency. All transactions on the network are public and can trace the complete path of each bitcoin in circulation. However, the persons making the transactions and the persons receiving them are included in the settlements, only as a sequence of numbers and characters - the so-called public wallets.
Does bitcoin have value?
The current money that we use on a daily basis is fiat money. The etymology of this word can tell us a lot about its specification. The name "fiat money" comes from the Latin word fides - meaning faith. In this case, we are talking about faith and trust in the governments and banks that are responsible for issuing and monetary policy.
The gold parity was in force until 1971. Until then, every banknote or coin produced had to be covered in gold. Currently, central banks that issue currency do not have to think about covering it in material goods. Individual countries have full freedom, guaranteed by international law, in setting the exchange rate rules of their currencies. The value of such a currency comes from a monopoly that guarantees the exclusivity of the issue and is legally reserved for the state by the state. An important support for the value of money is also fiscal policy, generating demand for the currency and citizens' trust in the state and the stability of its currency.
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