Bitcoin is the world’s largest and first digital currency, created in 2009 by Satoshi Nakamoto.
As a digital currency, Bitcoin is characterized by the fact that it operates without a central bank or a single administrator.
Instead, Bitcoin can be sent through peer-to-peer (P2P) networks, which in turn do not require intermediaries.
Bitcoins are not a physical currency, but digital codes that can be sent and received over a distributed network called the blockchain.
Because Bitcoins are not issued or backed by governments or central banks, they are considered legal tender.
Transactions on the Bitcoin network are validated by a network of computers (or nodes) that solve a series of complex equations. This process is called bitcoin mining.
In return for Bitcoin mining, the computers receive rewards in the form of new Bitcoins. Over time, mining becomes more and more difficult, so the rewards get smaller and smaller.
Because of the structure of the code, there will only ever be 21 million Bitcoins. However, in 2020, there were already 18.3 million Bitcoins in circulation.
The History of Bitcoin-Invention
Since its launch in 2009, Bitcoin has remained the most popular and largest cryptocurrency in the world in terms of market capitalization.
Its popularity has also contributed significantly to the introduction of thousands of other cryptocurrencies, now known as altcoins.
At its inception, the crypto market was originally hegemonic, but today there are countless altcoins in the landscape.
Bitcoin has also been controversial since its inception. Due to its decentralized nature, it has been heavily criticized for its use in illegal transactions and money laundering.
Since Bitcoin is untraceable, this makes the cryptocurrency an ideal target for illegal behavior.
Critics also point to the high amount of electricity used in mining, high price volatility, and theft on exchanges.
Bitcoin is seen by some as a speculative bubble due to the lack of oversight.