bitcoin

What is Bitcoin?

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If you are here it is because you have heard this term somewhere, maybe on the news, while you were having a coffee with your friends or even on a tv series? So, what is it?

Simply put, Bitcoin is a digital currency created by Satoshi Nakamoto, whose identity remains a mystery, to allow people send and receive money without the need of intermediaries, that is to say, banks.

The coin was probably created as a response to the financial crisis of 2007-2008 that hit all parts of the world and that was partly a result of the actions of banks giving money to people who could not pay it back.

Bitcoin works on what is called a blockchain, which is a chain of blocks that includes the information about all transactions. Some of the most important aspects of Bitcoin and other cryptocurrencies, but not all, is the fact that their networks are public, which means that the information on all transactions can be accessed by anyone. Yes, they can be accessed by anyone, but, no one, not even the parties involved in it, can change any of the details of the transaction once it is completed. This means the blockchain is immutable.

When using Bitcoin you need a wallet, which can be a hardware wallet (a device you can buy from Trezor or Ledger, for example), a paper wallet or an online wallet. This wallet has a unique id or wallet address, which is used to receive funds to it. As such, if you want to send some Bitcoin to a friend, you will have to ask him for his wallet address.

While Bitcoin is already used as a means of payment in many places, even Tesla accepted it for some time, its main obstacle to become widely accepted is its price volatility, that is in turn one of its strong points when it comes to investing.

For a more extensive description, please visit Investopedia.

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