What is Bitcoin

Bitcoin 

Bitcoin is the first cryptocurrency in the world - a form of online money that operates without government and banks. Developed in 2009 by an unknown individual (or a team) called Satoshi Nakamoto.

Bitcoin is not like traditional currencies (such dollars or euros):

Digital-only: It is not on paper or coin, but only on computers.

Decentralized: It is not run by some specific authority. Rather it operates on a network of thousands of computers all over the world.

Scarce in quantity: It will always be scarce with 21 million bitcoins and hence valuable.

How Bitcoin Works -

1. Blockchain (the public ledger)

The entire history of Bitcoin transactions is stored in a large online registry known as the blockchain.

Consider it to be a notebook that people may read and check, yet none can delete or correct.

New transactions are packaged into a new block and attached to the chain of preceding blocks every 10 minutes or so.

2. Transactions

When sending Bitcoin, you are making a message that states:

I am transferring this volume of Bitcoin in my wallet to another wallet.

Each wallet has two keys:

Public key: Like your account number (safe to share).

Private key: Your password (secret, which is used to sign and verify transactions).

After being signed, the transaction will be transmitted to the network.

3. Mining and Verification

In order to avoid fraud, Bitcoin relies on a process referred to as mining.

Computers that compile transactions, verify them and tackle complex mathematical puzzles are referred to as miners.

The initial miner to figure out the puzzle is allowed to append the new block of transactions to the blockchain.

New bitcoins are awarded to miners as a reward (this is how new coins are introduced into the economy) and transaction fees.

4. Wallet 

To transact with Bitcoin, you require a wallet, which is some sort of digital device (either an app, site, or hardware device) that holds your keys and enables you to send or receive coins.

Why Bitcoin is Important

Borderless payments: You can take money anywhere in the world within minutes without using the bank.

Privacy resistant: You cannot be blocked by any government or company on any of your transactions.

Hard to find: Bitcoin is being treated as a hedge against inflation and has a fixed supply of 21 million, making it scarce like gold.

Clear and safe: The blockchain is publicly available and once a transaction is confirmed it cannot be changed.

This is what that is in simple terms:

BTC = Bitcoin. Similar to USD, meaning U.S. dollar or EUR, meaning Euro, BTC is what is displayed on exchanges and wallets to signify Bitcoin.

Digital currency. It is on computers and the internet only, not on paper or coins.

Decentralized. BTC has no government, bank, or company in charge of it it is administered as a network.

Limited supply. It is that there will only ever be a finite number of BTC, and it will be scarce and valuable, just like digital gold.

 BTC are used by people to transfer money all over the world, purchase goods and services in some businesses, and as a investment to store value.

Why People Use Bitcoin

Borderless payments: Send money globally without banks or high fees.

Resistance to censorship: No one will stop your transactions.

Investment: It is viewed by many as digital gold due to its rarity.

Transparency & security: The transactions are open and cannot be manipulated once validated.

Summary 

Bitcoin is an electronic, decentralized currency that is powered by blockchain to store transactions in a safe and transparent manner. It is developed and sustained by a community of users and miners and its supply is limited, which makes it not only valuable as a payment system but also as an investment.