Bitcoin is a kind of cryptocurrency. It means that it is created digitally, managed digitally, etc. – all about crypto-space. This cryptocurrency is decentralized, it means that nothing and nobody can control it. Bitcoin is not printed or otherwise is created in a physical form. They are produced, or mined by people all around world.
This is the first successful example of cryptocurrency and the most successful digital coin for now.
Why Bitcoin Is Different from Other Currencies?
Bitcoins are used to buy anything online. In this sense, it is just like any other currency, say, like dollars or euro. Though there are some things that make bitcoin completely different from other currencies. The first, and the main difference is that bitcoin doesn’t have a central regulating authority, it is absolutely decentralized. Nothing and nobody can control the network.
Who Developed Bitcoin?
Satoshi Nakamoto is the bitcoin creator, though till now, nobody knows who or what is Satoshi, either it is a person, or a group of people. Though for now, he or they are among the first 50 richest people in the world.
Who Prints Bitcoin?
Nobody prints bitcoin. It is not physical and exist as a software. Bitcoin is created by a group of people called miners. Mining is done with application of computer power in a network called blockchain. The blockchain also processes all transactions in bitcoins. Everybody who uses the blockchain can get access to all information connected with a transaction.
Making Unlimited Bitcoins Is Impossible
Only 21 mln of bitcoins can be mined. Though those cryptocoins can be divided into parts, for example, in Satoshi, which is the smallest part of bitcoin, and it equal to one millionth of the coin.
How Bitcoin Is Backed up?
Any currency in the common sense of the word is backed up by some assets, like gold, silver, oil, etc. That shall be like this at least, though, in practice it may be different.
Bitcoin though is not backed up by anything physical. It is just mathematics.
Mathematical formula allows mining, or producing, new bitcoins. Those formulas are available in the Blockchain, everybody can see and check them. The software itself is free as well, so, anybody can check it and even work with it.
There are some features that make bitcoin different from usual currencies. The main of them are:
1. Bitcoin is decentralized.
The blockchain isn’t controlled by any authority or person. Every mining machine is an independent part of the network. At the same time, all machines build the network. It means, no controlling body can impose its rules on the network or take away bitcoins.
2. Bitcoin is anonymous
Or to some extend. Users can have any bitcoin addresses as they want to, and those addresses are not linked with personal information such as name or address.
3. Bitcoin is transparent
Each transaction is recorded in the blockchain and can be viewed by each user.
If you use a bitcoin address, everybody can see how many bitcoins you have, though they do not know that it is you.
4. Transaction fees?
There are no transaction fees in the blockchain itself, though a fee of exchange may apply.
5. Bitcoin is fast
Transaction is usually completed within some minutes maximum.
Bitcoin is a comfortable for many things already, though, we still do not have even the slightest idea about its real potential, as well as about the potential of blockchain. Both of them may vanish or change the future.