ndax logo

What is Bitcoin (BTC)?

Jan 03, 2020
byNDAX Labs

What is Bitcoin (BTC)?

Bitcoin is the world's first digital currency. Bitcoin is a digital coin that can be sent or received over the internet. This is known as a peer-to-peer electronic cash system. Bitcoin uses a transparent ledger of open and public transactions called the blockchain.

The blockchain is an open accounting system connected by thousands of computers (also known as nodes) working together to track the ownership of Bitcoin. Unlike fiat currencies which are usually controlled by national governments and central banks that govern the money supply, blockchain functions without a centralized authority like a government, central bank or financial institution.

• Bitcoin is decentralized meaning there is no one computer, person or institution that holds the ledger. With Bitcoin, every computer in the network is also keeping a copy of the ledger (also known as the blockchain).

• Every Bitcoin transaction is broadcast to everyone on the network. After the transactions have been verified, they are recorded in the public ledger.

• Bitcoin is issued to users on the system who help process transactions on the network, this is known as Bitcoin mining.

• Bitcoin miners are users on the system with highly specialized computers that verify and record transactions on the blockchain.

• Miners earn Bitcoin as a reward for their work updating and maintaining the blockchain. This is how new Bitcoin are created and enter into circulation. The rewards for mining new blocks in the blockchain have systematically steadily dropped over time.

• The standard set of rules and procedures that goes along with tracking the transactions and keeping the ledger by all of the users in the mining process is known as the network's protocol.

• The total number of Bitcoin that will be mined has a cap of 21 million. This makes Bitcoin unique compared to traditional fiat currencies (and some other cryptocurrencies) that do not have a specified limit.

• The limit of 21 million Bitcoin creates a level of scarcity for the digital currency, which simply stated means that in theory, they will be in short supply.

• This has led many to speculate that Bitcoin will be a better store of value compared to fiat currencies over a long period of time. The price of Bitcoin has soared to levels of over $20,000 in Dec. 2017, compared to a price of $0.003 in Mar. 2010.

• Because Bitcoin are transferred from person to person (known as peer-to-peer) using the internet without going through a bank or other financial intermediary, their transaction fees are normally much lower compared to traditional financial instruments like credit and debit cards.

• You can use bitcoin in any country. This means that for the first time nearly 2.5 billion of unbanked people in the developing world will have access to a financial platform.

• Bitcoin allows users to become anonymous. By encrypting the blockchain using cryptography, it is not possible to know who is involved with the transactions. For these reasons, Bitcoin is referred to as a cryptocurrency.

• The digital currency was created by someone (or possibly a group of people) known as Satoshi Nakamoto in 2009.

• Bitcoin's blockchain is now considered the first generation of the technology.

Original Author: Satoshi Nakamoto
Initial Release: January 9, 2009
Website: bitcoin.org

If you are based in Canada and looking for a Canadian Bitcoin exchange, then take a look at  NDAX. NDAX is an easy-to-use, beginner-friendly exchange that can give you easy access to trade Bitcoin and other cryptocurrencies like Ethereum, Ripple, Litecoin, Cardano, Dogecoin, EOS and Stellar.