What is Bitcoin?
Bitcoin is a decentralized cryptocurrency created by an unknown person or a group of people called Satoshi Nakamoto in January 2009.
No central "authority" or a single entity have control over it and instead it relies purely on math and cryptography.
Bitcoin (with the first letter capitalized) is a protocol that takes care of creation and distribution of tokens. These tokens are called bitcoins (the first letter is lowercase) or BTC and are stored on a public ledger - the blockchain.
The blockchain is a network of computers verifying and storing every single transaction passing through it. This distributed design makes Bitcoin both very secure and reliable.
We believe Bitcoin is popular not only because it has the network effect, but also because of these key features.
Because of the decentralized nature of Bitcoin, there is no government or bank involved in you entering the market. Simply download a wallet, get some bitcoins and start using it.
You are your own bank.
The blockchain is the most secure network in the world. Its security comes from the strong cryptography and the computing power offered by so-called "miners". The power of the network grows linearly but as of today, the network is around 40 000 times faster* than top 500 most powerful computers in the world.
Do you remember the last time you purchased something online with your Visa card? It takes up to a minute to just verify your card information. But that's not all. It takes between few days to months to confirm your transaction before it can't be reversed.
Bitcoin transaction, on the other hand, is instant. It takes a second or two to sign a TX with your private key and in general another 10 minutes to confirm the TX on the network.
Once the transaction is confirmed, it's difficult to reverse it. It gets harder with every other confirmation until it gets virtually impossible unless you have more than 50% of the network's hashing power.
The technology behind Bitcoin is difficult to understand but what's on the surface is very simple.
You're presented with a bunch of wallet addresses which are just hashed public keys. Think of the address as a unique email address that is used to send and receive emails.
Every time you want to receive a Bitcoin payment send your address to others. And reversely use others' wallet addresses to make payments.
You don't have to worry about what happens in the background, you wallet and the network will take care of everything.
Using the Bitcoin network is free in theory. If you have unlimited time the chances are your free transaction will be processed at some point.
However, most people incentivize miners to process their transaction with a low fee attached.
The current fee range is usually between $0.05 - $0.15 regardless of where you send your bitcoins. The fee stays the same whether you transact from LA to NY, or Germany to China - impossible with a traditional banking.
Though Bitcoin transactions are publicly stored on the blockchain for anyone to see, your identity isn't revealed by default. This property is called "pseudonymity".
Attaching your identity to a particular transaction is purely in your hands, hence you're the only one that decides how anonymous you want to be.
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* the current computing power of top 500 computers is around 0.000422 ZFlops/s. The estimated computing power of the Bitcoin network is around 16.4 ZFlops/s which is around 3 886 156% more. Please note that it's impossible to get an exact number because Bitcoin doesn't work with floats.