Bitcoin

Bitcoin is a cryptocurrency built on a peer-to-peer network using blockchain technology. It is the first and most popular cryptocurrency created. It serves as a decentralised currency that operates independently without the intervention of trusted third parties like governments or central banks.

Bitcoin was invented back in 2008 by a pseudonym person or group, Satoshi Nakamoto. It was first introduced in a white paper on October 31, 2008, titled Bitcoin: A Peer-to-Peer Electronic Cash System.”

The first Bitcoin transaction – also known as the genesis block – took place a little after that, on January 3, 2009.

Discovering Bitcoin’s uniqueness

Let’s dive into some of Bitcoin’s characteristics:

• Decentralisation: Bitcoin is a cryptocurrency and runs on the Bitcoin blockchain. The Bitcoin blockchain is a decentralised network of computers (or nodes) that publicly records all Bitcoin transactions. It is maintained by a network of computers (or nodes) that is in charge of verifying and validating transactions before adding them to the blockchain.
• Blockchain technology: Bitcoin transactions are recorded in blocks on the blockchain. Each block contains a list of transactions that are verified by miners through computing power. Then blocks are added to the blockchain in chronological order. This whole process is called mining.
• Security: The Bitcoin blockchain uses cryptography technology to secure transactions. Once confirmed by miners, they cannot be altered anymore.
• Limited supply: Unlike traditional fiat currencies like the US Dollar, Bitcoin has a limited supply of 21 million. So, once every 21 million Bitcoins are in circulation, no further Bitcoin will be mined.
• Transparency: All Bitcoin transactions are recorded on the blockchain, a public decentralised ledger that anyone can access.
• Borderless: Bitcoin can be sent and received easily and quickly across traditional borders. 

Bitcoin has been created to address several problems inherent in traditional financial systems and centralised currencies. Some of the key problems that Bitcoin aims to solve include:

• Financial centralisation: Bitcoin operates on a blockchain, a decentralised network of computers (also known as nodes). The decentralised nature of Bitcoin removes the need for a central authority or trusted third party, such as a government or bank, to control the currency, reducing the risk of censorship, manipulation, and single points of failure.
• Opacity of the financial system: The Bitcoin blockchain is a public ledger that records all transactions in a transparent and immutable manner. Therefore, anyone can verify transactions and track the flow of funds, promoting accountability and reducing the risk of fraud or corruption.
• Financial exclusion: Bitcoin prevents financial exclusion by providing access to decentralised financial services for individuals who are underserved or excluded by traditional financial institutions. With Bitcoin, anyone with an internet connection can send, receive, and store value without the need for a bank account or identification.
• Complex cross-border transactions: Bitcoin solves the complexity of traditional cross-border transactions. BTC transactions can be conducted across borders without the need for currency conversion or intermediaries, making it an efficient and cost-effective solution for international remittances and commerce. The borderless nature of Bitcoin facilitates global transfers and economic activity.
• Inflation: Bitcoin has a fixed supply cap of 21 million coins, making it inherently deflationary. Unlike traditional fiat currencies, which can be devalued through inflationary monetary policies, Bitcoin is designed to maintain its purchasing power over time, making it a hedge against inflation and currency depreciation.
• Lack of financial sovereignty: With Bitcoin, individuals have full control over their funds and financial sovereignty. Users can store and manage their wealth independently, without relying on banks or other third parties. This empowers individuals to be their own bank and protects against asset seizure, capital controls, and confiscation.

Overall, Bitcoin addresses a range of issues related to trust, security, transparency, financial inclusion, and economic freedom, offering a viable alternative to traditional financial systems and traditional fiat currencies.