Published April 15, 2021 By The Capitalist
Bitcoin’s open-source code (software), launched
in 2009 by an anonymous developer, or group of developers, is known only by the
pseudonym Satoshi Nakamoto. This ingenious codebase enabled a completely
trustless network between strangers. And both sender and receiver can remain
anonymous if they so desire.
What is Bitcoin?
Understanding Bitcoin & Blockchain in 10 Minutes
Bitcoin is not printed by a government or issued
by a central bank or authority. Bitcoin is created by ingenious open-source
code (software) installed on thousands of peer-to-peer computers worldwide.
These computers running Bitcoin software solve
complex math equations to confirm that every transaction on the network is
authentic and original. This happens every 10 minutes and has been happening
uninterrupted every 10 minutes since Bitcoin open-source code was published in
2009.
I think the simplest way to answer the question,
What is Bitcoin?, is that Bitcoin is a digital currency. Instead of paper,
coins, or plastic “money” in your wallet – Bitcoin is sent and received over
the internet using your smartphone (or computer).
Bitcoin can be sent and received by anyone
worldwide with access to an internet connection.
Bitcoin (digital currency) is essentially money
of the internet. Accessible by anyone, anywhere in the world, using a
smartphone or computer with Bitcoin software installed and a connection to the
internet.
The Bitcoin network is completely decentralized.
Thousands of computers around the world running specialized software confirm
that every transaction sent on the Bitcoin network is authentic and hasn’t
already been sent/spent before.
Once confirmed as being authentic, this
transaction (block) is added to the blockchain. Bitcoin transactions cannot be
reversed. Once sent and confirmed as being authentic, it’s recorded in the
blockchain. There is no “charge-back” capability with a Bitcoin transaction.
To sum it up, Bitcoin is not oil-money or
military-superpower money. Bitcoin is MATH money. A cleaner, more honest
version of money. Money created of the people, by the people, for the people.
Bitcoin enables anyone to self-bank. Simply by
using the smartphone already in your pocket (or hand). It levels the playing
field. Bitcoin gives everyone access to the internet, the ability to
participate in the Bitcoin revolution. You should join us.
The blockchain is what makes Bitcoin so special.
And truly the next generation of currency. The blockchain is a digital
transaction ledger that is viewable and searchable by anyone.
It records every transaction ever sent and
confirmed on the Bitcoin network. And allows anyone to verify the details of
every transaction. You can review the details of any Bitcoin transaction using
a block explorer by simply entering either the block number, sender’s address,
receiver’s address, or the hash/txid number.
With the blockchain, you never have to question
whether a payment was sent or received. You simply check the block explorer
which acts as a permanent record of every transaction confirmed by the Bitcoin
network.
You don’t even need to take my word for it and I
never need to take yours. The blockchain provides proof. For anyone, at any
time to verify if a transaction took place. And every possible detail
imaginable about that transaction. Everything except for the identity of the
parties involved.
Bitcoin is purchased and sold using a
cryptocurrency exchange. Very similar to an online stock brokerage, except
instead of stocks – you guessed it, they enable the buying and selling of
Bitcoin and other cryptocurrencies (altcoins). Coinbase is the largest and most
popular Bitcoin exchange in the United States.
It has a stellar reputation for being
user-friendly and very secure. However, the fees are on the high side. Binance
US is another very popular crypto exchange and offers buying and selling of a
large variety of “altcoins”, in addition to Bitcoin. And their fees are lower
than most other competitors. Binance is the largest and most popular
cryptocurrency exchange in the world.
Once you purchase your Bitcoin, send it to your
personal Bitcoin wallet. And don’t lose your password! Anyone gave access to
both your “seed phrase” (private keys) and your password can steal your Bitcoin
by re-populating YOUR wallet on their device. Just like you can do if the
device you store your Bitcoin wallet on is ever lost or stolen.
So be careful. There are likely few worse
feelings in the world than realizing you’ve become a Bitcoin millionaire but
can’t access your Bitcoin because you forgot your password. It’s happened
countless times to people throughout Bitcoin’s 10+ year history. You don’t want
to be another sad headline in the news.
Bitcoin is stored in your Bitcoin wallet. A
wallet is an ultra-encrypted software that keeps your Bitcoin safe. And yours.
There are 2 major types of Bitcoin wallets; a hot wallet which is a software
application installed on either your computer or smartphone and a cold storage
wallet that is its own hardware device that operates on its own proprietary
software and is not continuously connected to the internet.
Most Bitcoin wallets are hot wallets or software
applications that securely store your Bitcoin and are installed on devices
connected to the internet which gives you easy and instant access to accept and
send Bitcoin anytime. All of the top Bitcoin hot wallets are free to download
and available either from an official website (PC and Mac), Google Play
(Android), or App Store (iOS).
The term “altcoins” is short for alternative
coins.
Every time the original Bitcoin code has been
modified it is called a “fork”. A new, original blockchain (hardfork) resulting
from the modified Bitcoin code is then installed onto various computers (nodes)
worldwide.
This new blockchain (altcoin) is given a
different name and symbol by their developer(s) to differentiate this new code
(altcoin) from the original Bitcoin code. An altcoin of value will improve (s)
to the usability of its predecessor’s; ie. faster confirmation time, lower
network fees, more energy-efficient mining, privacy features, etc.
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