Bitcoin

Bitcoin for Dummies: What is Bitcoin?

Is Bitcoin real, Is Bitcoin Legal, is it a scam, is it here to stay, what is Bitcoin and many more questions have been asked ever since the biggest cryptocurrency debuted on the financial scene. More of these questions are expected to be asked amidst the Bitcoin halving event expected to skyrocket the price next year.

Bitcoin has seen a whole lot of questions surrounding its existence. Bitcoin experts and fanatics, irrespective of the number of doubts about the digital coin, are enjoying the infinite importance that it brings.

Bitcoin has come a long way from being tagged as “a scam,” “something associated with criminal activities,” and whole other derogatory names, to be the “go-to” in the financial world today. Enjoying secured, reliable, and faster transactions, with almost no charge, as well as making financial gains by investing in a digital coin, is something fascinating.

Bitcoin is in its era of mass adoption. The digital coin is being adopted for payment methods, investment plans, and even being tasked to solving some of the economic woes of countries. The digital currency has also attracted interest from many tech giants and multi-billion dollar corporations.

Bitcoin couldn’t be doing any better than it is now. Well, technically speaking, it could, but that still doesn’t take away the fact that its journey has been nothing short of a memorable one.

Despite the enormous waves Bitcoin is making, there are still a lot of questions about it, which is keeping many people on the sidelines, who very much wants to hop on the Bitcoin bandwagon.

There are ‘crypto naysayers,’ and there are people who have little knowledge of what Bitcoin is and how it works. This piece sets to cut down the hours you spend a day contemplating whether Bitcoin is real or just a scam that will soon fade away.

What is Bitcoin? Technical Definition of Bitcoin

Bitcoin is a decentralized cryptocurrency that can be sent from one user to another user on its peer-to-peer network without any middleman or intermediaries. Thus Bitcoin isn’t controlled by a single administrator or a central bank or any central authority for that matter. Bitcoin is a decentralized payment network and a form of money.

Bitcoin on Blockchain

Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain, which is also its underlying technology.

The blockchain technically provides almost all the known plausible functions of Bitcoin, ranging from its decentralized feature to its transaction verification feature without any third party. When Bitcoin first burst into the financial scene, it was used interchangeably with its underlying technology, Blockchain, and this was due to the little knowledge people had on them at the time.

The confusion between the two has, however, been worked out as the knowledge of both Bitcoin and Blockchain have evolved into a new era.

Bitcoin

Bitcoin was created by an unknown individual who hid behind the moniker, Satoshi Nakamoto. Though an earlier report cited that the figure behind the establishment of Bitcoin has denied any involvement with the technology.

What is Bitcoin? The digital currency appeared in 2008 and debuted on the financial scene in 2009 after its source code was released as open-source software. The digital coin completed its first-ever transaction on January 12, 2009.

You can buy Bitcoin with fiat currency but can also get Bitcoin without buying it through a process known as mining. Bitcoin’s emergence was as a result of the big financial traditional banks and other financial institutions overcharging clients on every little transaction they made. Bitcoin was therefore developed to make the client or seller the one in charge, free from any middle man or central authority.

Bitcoin transaction also allow its users to control their funds as well as have access to in-depth knowledge of what’s going on with every transaction that you make.
What started as a solution to financial bodies, layer became a tool in the hands of criminals for money laundering. Bitcoin is now one of the most sorts after digital currencies.

Bitcoin offers total anonymity to its users. When one makes a Bitcoin transaction, the identity of the person behind it, the intended account number, the financial balance, and the purpose of the transaction are all anonymous even though all transactions are recorded in a public ledger.

Bitcoin transactions also boast of many excellent properties aside from the anonymity it provides. Bitcoin transactions are also secured. Bitcoin transactions are made through Bitcoin addresses. A secured set of numbers and letters are generated for every Bitcoin wallet which allows you to send and receive Bitcoins into your Bitcoin Wallet.

Although Bitcoin funds are stored in a public key cryptography system, only the owner of the account has the private key to engage in any transaction.
Bitcoin transactions are also fast, as compared to transactions by traditional banks.

Though some experts argue that Bitcoin is a scam, this argument at the moment holds no water as the scenario surrounding its operation is entirely different from the ancient Tulip mania it is mainly compared to.

Mr.Oak
Cryptocurrency writer and analyst. Contact me on mroak22@gmail.com

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