Bitcoins have become increasingly well-known and popular form of currency in recent times. Are you wondering what exactly is a Bitcoin? Here is what makes the Bitcoin different from other currencies, and how it spread like a wildfire, springing out of no-where.
Bitcoin is not a printed or physical currency. It is an electronic or digital currency with no individual having control over it. Produced by businesses and people, it is the first such form of money created, known as cryptocurrency. While real world sees normal currencies, Bitcoin is an almost universal or global currency that runs on billions of computers worldwide. What sets a Bitcoin apart from other currencies is the fact that it is decentralized on not owned by any bank or company.
Who created it?
A software developer, Satoshi Nakamoto, proposed and created the Bitcoin. He looked at it as an opportunity to introduce in the market a new currency which is free from control or central authority.
Who prints it?
As said earlier, Bitcoin does not exist in physical or printed form. It is simply a digital currency that accommodates digital transactions. You can make digital transactions using Bitcoins, however there is no way to churn out unlimited Bitcoins. The Bitcoins are designed such that no more than 21 million Bitcoins can be mined in the world at any point of time. Bitcoins, like most currencies can be broken into smaller amounts. One hundred millionth of a Bitcoin is known at Satoshi, after the creator.
What is a Bitcoin based on?
While for conventional use and outwards appearance, Bitcoins is based on silver and gold. However, in reality, a Bitcoin is based largely on mathematics. It is an open source with nothing to hide. It is thus possible for almost anyone to check whether its running the way they claim.
What are the characteristics of Bitcoin?
- It is not owned by a particular company or bank. It is decentralized and not available as printed currency. All softwares that mine Bitcoins form a network, and work connected together. It works on the theory that if one network is out of function, the money can still flow.
- Unlike the bigger companies or banks, it is easy to set up a Bitcoin account in seconds.
- Bitcoin addresses are not linked to any information that is personal in nature and they are anonymous in nature.
- The transparency is another major aspect, with all Bitcoin transactions shown on a large chart, also known as a blockchain. However, it no names are attached and hence nobody knows who made the transaction.
- It has a very minimal transaction fee when compared to the bank fee. Moreover, the Bitcoin is a faster way of making the transaction with the money arriving almost as soon as the transaction is processed. However, once you have sent the Bitcoins, the transaction is non-repudiable and your Bitcoins are gone forever.
Bitcoins or cryptocurrency has been largely changing how the world looks at money. While it is still debatable whether it is possible to live off Bitcoins, some people have tried doing so. However, slowly but steadily, Bitcoins are making their presence felt in the economy worldwide and there is no way they are going to disappear anytime soon.