What Is Bitcoin?: The Essential Explainer
Bitcoin, or ₿, is a digital currency that is decentralized. This means that no single bank or administrator controls it. Therefore, it can be sent from one user to another on the peer-to-peer network without intermediaries. Essentially, it is the online version of cash. People who own this cryptocurrency can use it to purchase products and services, such as luxury cars, NFTs and electronics.
Who created Bitcoin?
Bitcoin was the world’s first cryptocurrency. This is a digital asset created and safeguarded using cryptographic algorithms – which are complex mathematical algorithms.
It was invented in 2008 by an anonymous individual or group known as Satoshi Nakamoto. According to Nakamoto, the cryptocurrency’s goal is to create an individual-to-individual electronic cash system without any intermediary involvement.
What exactly is it?
Bitcoin is essentially a decentralised digital currency. Every transaction is like a message which is digitally authorised using cryptography and verified by the entire network. Transactions are public and are found on the public ledger known as the blockchain. Users also have the option to remain anonymous by using encrypted keys.
There is no need for a bank or government to authorise the transfer. This means that people do not need a bank account, a verified address and records to buy or transfer cryptocurrency.
Bitcoins differ from traditional money in that they are “mined.” People called miners create new ₿ by solving very complicated mathematical problems that verify transactions. Currently, creating Bitcoins consumes 143.5 terawatt-hours of electricity each year.
How can I buy cryptocurrency?
You can buy ₿ online. Go to a crypto exchange, such as Coinbase or Binance, then choose a funding account (such as a bank account, PayPal, credit card etc) and place an order to buy crypto.
Bear in mind that when the transaction is complete, you’ll own a portion of a Bitcoin. This is because buying one whole ₿ depends on the current market price. For example, if the current price is £30,000, you need to spend that much money to buy one ₿. You can then store your Bitcoin in an online or offline wallet of your choice.