Bitcoin is a cryptocurrency based on blockchain technology, which has been very popular in recent years, mainly due to its potential as an inversion or means of “value transfer” without intermediaries. Notably, this cryptocurrency pioneered the sector and made blockchain technology globally known.
Bitcoin transactions are verified and registered on the blockchain through mining. Miners use their computing power to solve complex mathematical problems; when these problems are solved, a “new block” of transactions is added to the blockchain, which results in miners being rewarded with new bitcoins for their work.
History
In November 2008, “Satoshi Nakamoto” (pseudonym of the creator) published a publication in which he described a P2P (Peer to Peer) payment system that he identified as Bitcoin. However, not until January 2009 this cryptocurrency began its operations in the ecosystem of the first network based on the Bitcoin blockchain protocol.
After a few years, cryptocurrency became more robust thanks to the great receptivity of different people, businesses, and companies. Despite several years after its creation and the emergence of new cryptocurrencies, Bitcoin continues to be the cryptocurrency with the highest value and demand globally.
Main features
The main feature of Bitcoin is that it is a public network whose algorithm makes it function as a cryptographic ledger, in which each of its operations is recorded in a public and decentralized manner, allowing the network users themselves to be in charge of auditing, controlling and giving value to the crypto-assets exchanged in the network, thus minimizing any type of error or handling by third parties. It is important to note that Bitcoin does not depend on an institution, company, centralized body, or governmental entity.
The Bitcoin ecosystem has an encrypted database that allows any information to be stored, besides the fact that each record generated is unique and unrepeatable, as it has a unique fingerprint. Instead of storing data in a single location (as a central database), they distribute the Bitcoin blockchain across thousands of computers worldwide, which makes the system more secure and resistant to manipulation.
The amount of bitcoins available is limited since the platform has been developed in such a way that only 21 million units can be mined (created), which allows the cryptocurrency to have more excellent stability and value (especially in comparison with Fiat money, which can be designed in an unlimited manner). It is important to note that the issuing of new bitcoins decreases over time thanks to a process known as “halving,” where approximately every four years, the reward received by miners for validating transactions is reduced by half, which contributes to the scarcity of the cryptocurrency and the increase in its perceived value over time.
Bitcoin and bitcoin
Within the crypto world, usually, when talking about “Bitcoin” (capital letter), reference is made to the system or protocol that supports such an ecosystem (blockchain). In contrast, when we talk about “bitcoin” (lowercase), we refer to the cryptocurrency that operates within that ecosystem.
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