What is bitcoin? You may be one of the many people who are curious how the price of bitcoin continues to soar. Actually what is bitcoin?
What is Bitcoin?
Many people think that Bitcoin is a very confusing thing, even though Bitcoin is something that can be easily understood.
If asked what bitcoin is (abbreviated as BTC), the simplest explanation is:
Bitcoin is a decentralized global transaction cash system.
Based on the journal written by the inventor (reported in Bitcoin.org), Bitcoin is actually:
A purely peer-to-peer version of electronic cash would allow payments to be sent directly to another party without going through a financial institution .
Have you ever wondered how the transaction system (selling, buying, transferring money) happened? Yes, there are always third parties who mediate, for example: banks (interbank transfers), Visa, Mastercard, Paypal and so on.
Have you (from Nigeria) ever bought goods on Jumia or Paypal? What do you think about the payment system abroad? Your example of using existing credit cards Visa logo, nah about how such payments could walk?
Visa and mastercard credit cards, two types of credit cards that are often used for online payments in Nigeria.
As we all know, every institution providing financial services (including banks) must have their accounting books. Surely there is time, energy and costs that must be spent to be able to run the transaction. That’s why we (the customers ) are charged an additional fee ( charge ).
Continuing our initial discussion, what is Bitcoin? Bitcoin changes and changes the cash book system into a global accounting system. Of course the benefits are reducing time and costs.
Who Created Bitcoin?
There are many people who say that Bitcoin was created by someone, even though every major discovery is always made by a group of people (one team).
Bitcoin was discovered by a team or group of people with the name Satoshi Nakamoto.
The Bitcoin system designed by Satoshi is open manner , meaning that the programming code can be seen and checked by everyone in the world.
So, there are no hidden secrets and the creator does not have a conflict of interest.
The Satoshi Whitepaper document that explains the Bitcoin system
If you are interested in knowing what a Bitcoin programming language or algorithm looks like, then you can research Satoshi Whitepaper.
3 Characteristics of Bitcoin
The author believes, besides wanting to know what Bitcoin is, you still want to know what exactly is its function? Is it safe for Bitcoin transactions? and so forth.
Let’s just discuss the characteristics of Bitcoin.
Characteristics 1: Bitcoin as a Payment System
Characteristics 2: Bitcoin as Digital Gold
One of the oldest investments is gold investment. People (from ancient times to the present) see gold as a high-value object.
Is gold really worth it? Gold itself has no value, gold is only a lump of stone.
Then where is the value of gold? It’s a bit confusing, because everyone agrees that gold has a certain value (you can see: today’s gold price to know the latest prices).
Why do people think gold is more valuable than other stones?
The answer is gold has unit characteristics that make it a ” store of value “, namely:
The amount of gold in this world is limited and rare. Gold has soft properties and can be melted and formed into small units.
Example: gold coins, precious metals 1 gram and so on. Gold is also stable, not degraded, easily recognizable and hard to fake.
Bitcoin has all the same characteristics as gold, such as:
- The number of Bitcoin is limited, that is, there are only 21,000,000 Bitcoins in the world.
- Bitcoin can be broken down into smaller units without losing the value of the unit (1 Bitcoin = 100,000,000 Satoshi – the smallest unit of Bitcoin, same as grams in Gold). We can buy less than one Bitcoin.
- Bitcoin technology is also stable and will not experience degradation.
- Very difficult to make fake Bitcoin, because of the Blockchain system .
- You can move Bitcoin anywhere in the world in minutes, regardless of the number of Bitcoin.
That’s why people refer to Bitcoin as digital gold, but digital gold is better. In essence, Bitcoin is like gold – this is why many people call Bitcoin ‘digital gold’ or ‘Gold 2.0’.
Characteristics 3: Bitcoin is similar to the Internet
Youtube courtesy, Finansialkucom – What is Bitcoin
Is Bitcoin Becoming a Digital Currency Revolution?
So, if asked, what is Bitcoin? You can imagine a container (bucket) in which there is a debit card (or credit card), gold and internet.
Everything is one of Bitcoin.
- The above is curated by my editorial team by adding some additional information from additional reference sources.
- The article above aims as a means of education, not as a suggestion to invest or speculate.