Bitcoin is a digital currency originally proposed by the pseudonymous ‘Satoshi Nakamoto’ in 2008. The identity of Satoshi Nakamoto is still unknown, although speculation about potential Satoshi Nakamoto candidates is a popular topic in the cryptocurrency community.
Its first implementation was in early 2009 as open-source software. The Bitcoin network is maintained in a decentralized manner with no central authority having the power to censor or reverse transactions. The Bitcoin network is available 24/7, and BTC can be sent globally with no restrictions.
Unlike local currencies, Bitcoin is completely digital. User balances are kept on a public ledger that is fully transparent and accessible to all. Similarly, anyone can operate a Bitcoin node or function as a Bitcoin miner, provided they have the necessary knowledge and resources. Bitcoin inspired the launch of other digital currencies that are collectively referred to as altcoins.
The Bitcoin network is maintained by a network of nodes that communicate with each other to arrive at a consensus regarding the current state of the ledger. The Bitcoin ledger consists of “blocks”, which contain information about Bitcoin transactions. A new block is added to the ledger approximately every 10 minutes. Each block is linked to its previous block with a cryptographic hash, which is why the type of ledger used by Bitcoin is referred to as a “blockchain”.
Since Bitcoin is a decentralized network, there needs to be a way to select which node gets to add a new block to the Bitcoin blockchain. In Bitcoin, this is decided through “mining”. Bitcoin miners set up their hardware to tackle resource-intensive mathematical problems, and whoever gets the right solution first gets to add the next block to the blockchain. In return, the miner receives a “block reward” in the form of BTC coins.