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What is Bitcoin

During the last couple of years, due to various international tensions, our world’s financial system has gone through a couple of significant changes, one of which is the appearance of digital currencies such as Bitcoin.

Bitcoin, created in 2008 by Satoshi Nakamoto, represents a form of digital currency, which is created, spent and held electronically.

Probably Bitcoin’s best attribute is the fact that it represents a decentralized currency, which is the main difference when compared to traditional money, also known as fiat. To put things better into perspective, Bitcoin is not controlled by any sort of institution, but rather by the people, who are also responsible for carrying out transactions and creating the coin, via a process named mining. Its decentralized status is one of the main factors that brought bitcoin fame, as governments, banks and other financial institutions have no control whatsoever over the value and overall state of the coin.

While fiat is based on a country’s wealth, but also on precious metals such as gold and silver, bitcoin is based on complex mathematical formulas, solved by software programs when creating more coin.

Another important characteristic of bitcoin is the fact that it is technically anonymous. This means that as an individual, you can hold millions of dollars’ worth of bitcoin, without having to give out your name. Users store bitcoin on addresses, which aren’t linked to personal information. This doesn’t mean that people should carry out illegal actions using the currency, as transactions are also publicly available in a ledger, known as the blockchain- thus offering full transparency.

Bitcoin is also quite secure, fast (with coins taking a couple of minutes to be sent across the world), and insanely cheap. You can technically send as many coins as you would like without paying a dime in fees, although this is discouraged, as you’ll have to wait much longer for your transaction to be processed.

Thanks to all of these benefits, Bitcoin has been following an ascending path, and if things continue this way, chances are that in the near future, financial innovation will lead to worldwide bitcoin adoption and a better financial system for everyone.

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