Bitcoin is a digital form of money, but unlike the conventional fiat currencies we are all so used to, it is not controlled by a central bank. Instead, the backbone of bitcoin’s financial system is run by thousands of computers distributed all over the world. Anyone can participate in this ecosystem after installing certain open source software.
In simple words, bitcoin is one big register file (you can think of Excel as an analogy), where the information about all payments and receipts is stored, this file can not be faked or changed, and the value of cryptocurrency is constantly increasing due to its limited quantity and absence of additional emission.
VTS is the very first cryptocurrency, which appeared in 2009. The principle of the bitcoin peer-to-peer network, which Satoshi Nakamoto worked on, was first introduced two years before the digital currency appeared. Despite the fact that Nakamoto was able to attract the attention of thousands of programmers to his project, no one believed in his success at the time. Now you can even get a Cryptopay card and use it to pay for online purchases with your bitcoins.
The cryptocurrency is based on blockchain technology, which makes it fundamentally different from all previously created electronic currencies and payment systems. Bitcoin blockchain (BTC) is not connected to any physical assets or “official” fiat currencies, and the price of BTC digital coin is regulated exclusively by market supply and demand, i.e. by how much value people put into it, just like gold.
The first bitcoin transaction was done by American Laszlo Hanyecz, who offered 10000 BTCs to anyone who will bring to his house two Italian pizzas. It is hard to imagine what emotions Laszlo experienced at the moment when BTC rate started to grow rapidly. Today there are hundreds of millions of transactions using cryptocurrency. Therefore, the question “what is bitcoin” is answered in simple words – money that has its own exchange rate in relation to another currency, but has no physical form.
Distinctive features of BTC as a cryptocurrency
- No control. Complete lack of control over the system by anyone. Millions of computers that mine bitcoins are part of the system. No one has the ability to dictate their terms to cryptocurrency owners.
- It’ s simple to use. It takes about 5 minutes to create a BTC wallet that is ready for immediate use. You won’t be asked anything, you don’t have to pay a penny. You can even get a bitcoin prepaid card.
- Anonymity and transparency. A Bitcoin wallet is absolutely anonymous and completely transparent at the same time. It is very easy to create a great many wallets without giving your name, phone number, etc. But the bitcoin network stores all transaction history. If you publicly advertise that this wallet is yours, then anyone can know all your transactions and the amount of BTCs in your account, to ensure anonymity you need to use one wallet for one transaction.
- Irrevocable transactions. Once bitcoins are sent to the addressee, it is impossible to return them, unless the recipient himself wants to do it.