Bitcoin 101

Check out our new platform 👉

Photo by André François McKenzie on Unsplash

What is Bitcoin?

Bitcoin has to be broken into two parts. The blockchain itself, and then the asset Bitcoin.

The first part is the blockchain. This the network that is used to send and receive the actual digital asset Bitcoin.

The blockchain is the public ledger, or record, of all transactions placed in chronological order via a timestamp.

The second part is Bitcoin, the asset. This is a digital store of value that is actually placed inside your wallet. Bitcoin is used as a payment system that is peer-to-peer and permissionless. There is no third party involved that ultimately decides when or how you can spend your money. You are in total control and essentially get to be your own bank.

How is it valued?

The price is determined by scarcity. There will only ever be 21 million released into circulation.

Where does new Bitcoin come from?

Mining is the term used for creating new Bitcoin. New Bitcoin is issued as a reward for producing a new block on the blockchain. The blocks contain all of the confirmed past transactions and are based on computing power.

The White Paper

The white paper is the original document written by Satoshi Nakamoto that introduces Bitcoin to the world. The paper breaks down in detail on how Bitcoin works and why the concept of Bitcoin is actually needed. I have read it probably ten or more times, and it still blows my mind. I fully understand it, but I feel like I could not do it justice trying to re-explain it to you. In all reality, I would probably get something wrong, and I don’t want to do that to you. I am not a computer scientist, nor am I qualified enough to explain the technical aspects of the blockchain. I will leave that to the professionals. Give it a read to understand the pure scope and power of such a revolutionary concept.

Bitcoin 101 was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Post fetched from this article