What is Bitcoin?

Bitcoin is digital money used for secure and instant transfer of value.

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What is Bitcoin

Bitcoin is a worldwide cryptocurrency and digital payment system called the first decentralized digital currency, as the system works without a central repository or single administrator. It was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.

Bitcoins are decentralized, purely digital virtual coins exchanged directly between two parties online with no middle man. Unlike modern fiat money, Bitcoin, which has often been called "cash for the Internet," is not controlled or backed by any bank or central government authority, like the Federal Reserve, for example.

Bitcoin Block Explorer: The Blockchain

Unlike credit card transactions, Bitcoin transactions, which take place internationally every day, are irreversible; they can only be refunded by the person receiving the funds. Bitcoin users don’t have to divulge certain pieces of identifying information, like their bank account and Social Security numbers or physical addresses but as a record traceable trail of each of transaction is left behind in a public log known as the blockchain. The public record prevents people from spending the same bitcoins more than once.

The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the 'current' part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.

Difference between Bitcoin and blockchain

Bitcoin is a type of unregulated digital currency that was first created by Satoshi Nakamoto in 2008. Also known as a "cryptocurrency," it was launched with the intention to bypass government currency controls and simplify online transactions by getting rid of third-party payment processing intermediaries. Of course, accomplishing this required more than just the money itself. There had to be a secure way to make transactions with the cryptocurrency.

Bitcoin transactions are stored and transferred using a distributed ledger on a peer-to-peer network that is open, public and anonymous. Blockchain is the underpinning technology that maintains the Bitcoin transaction ledger. Learn more here and watch the video below for an overview:

How and where to store your bitcoins?

Just as regular coins are stored in your wallet, Bitcoins are also stored in a dedicated digital wallet. Each wallet has its own public digital address, to which coins can be sent. The address is a string of numbers and English letters about 30 characters long. There is no cost to create a new wallet, or a limit on the amount of wallets you can have. There are several types of wallets, which differ mainly in their security levels. Click here to read more about bitcoin wallets