What is Bitcoin?
HISTORY OF BITCOIN
Satoshi Nakamoto, Blockchain, and Bitcoin have become household names that expand our view of currencies and “financial assets” around the world. Bitcoin was created in 2009 as the first decentralized peer-to-peer currency that works with Blockchain technology.
Mentioned for the first time in a white paper released by a person (or group of people) with the alias of Satoshi Nakamoto, Bitcoin promised the possibility of tax-free exchanges, stability in signatures and digital currencies instead of using the currencies issued by the governments. All exchanges are registered in a registry “book” that anyone can access publicly, which ensures total transparency. By way of visualization, the user only sees the amount in Bitcoin contained in his wallet and the results of the different exchanges he has made with the currency.
However, behind the scenes, a public “book” called the Blockchain is being shared on the Bitcoin network that operates 24 hours a day, 7 days a week. This “book” contains every exchange processed between users on the network.
Nakamoto himself once mentioned that he was a 37-year-old man living in Japan. However, due to his perfect English, the hours he was interacting on the forums, and his software was not tagged in Japanese, reasonable doubts about his identity are raised. Around mid-2010, Nakamoto moved on to other things, leaving Bitcoin in the hands of some prominent members of the BTC community. Satoshi also named Gavin Andresen lead developer.
It is presumed that the figure of Satoshi Nakamoto owns approximately 1 million Bitcoins, which represents about 5% of the global emission that exists of the asset.
Currently there are a large number of companies and small businesses that accept Bitcoin as a payment method for all types of services. Thanks to its international reach and the fact that users can exchange pseudo anonymously, it has made its way into regulated sectors such as online gambling and poker games.
There are a large number of platforms that make it easy to exchange Bitcoin for other types of cryptocurrencies, including stable-price coins called stablecoins.
Bitcoin transactions are usually carried out on platforms called “wallets”. Exchanges can also be made using paper tickets with the private key printed on it.
HOW BITCOIN WORKS
How does it work
Bitcoin is a virtual means of payment, that is, it does not count as physical currency nor is it printed as a banknote from a central bank. These types of currencies are generated through complex computational calculation processes, known as blockchain (chain of blocks).
Basically, each Bitcoin is a virtual file that is stored in a digital wallet, either in software or hardware (cell phone, computer or dedicated pen drives).
A Bitcoin address is a form of unique identification for each user that is used to make exchanges (either send or receive) cryptocurrencies quickly and easily.
In the world of cryptocurrencies, the address works in the same way as in the traditional financial system, whether it is to send or receive money transfers. Which is to say, it works like a kind of bank account.
An exchange with Bitcoin is simply a transfer of value between two wallets, which is registered in the blockchain (chain of blocks).
To send money from one wallet to another, the emissary must sign the transaction with his private key to prove that he is the owner of the funds.
How do you mine bitcoin?
If we think of gold mining, this consists of removing land with heavy machinery in order to get enough gold to pay the costs of the exploitation and obtain a profit. The same happens in Bitcoin mining, with the difference that the machinery is complex computer equipment that performs computational calculations.
Each transaction is registered in a public “book” called blockchain, this allows to investigate the history of a Bitcoin in order to avoid theft, false copies or undo transactions.