By the way, what even is Bitcoin ?
Key features of Bitcoin
Bitcoin, also known as BTC, is the first and most widely known cryptocurrency. It is a digital form of money that can be traded and stored online. Bitcoin differs from traditional currencies in several key ways: decentralisation, blockchain technology, limited supply and anonymity. Bitcoin is not controlled by a central institution such as a bank or government. Instead, it is operated and monitored by a network of computers called nodes. Bitcoin transactions are recorded in a public, distributed database known as the blockchain. This technology ensures that all transactions are transparent and immutable. In addition, there will only be 21 million bitcoins in total. This scarcity is defined by the code of the Bitcoin software and contributes to its value. Bitcoin transactions are pseudonymous. This means that while transaction details are publicly available, the identities of users are protected by cryptographic addresses.
The genesis of bitcoin
The creation of bitcoin can be traced back to the financial crisis of 2008. During this time, confidence in the traditional financial system and banks was eroding. In October 2008, Satoshi Nakamoto published a white paper entitled "Bitcoin: A Peer-to-Peer Electronic Cash System", which described the idea of a new form of money that would operate without central control. On 3 January 2009, the first bitcoin block, known as the Genesis block, was mined by Nakamoto. This block contains a message referring to the financial crisis: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks". This message underlines the motivation behind the creation of bitcoin: to provide an alternative to the traditional financial system.
How bitcoin works
Bitcoin is based on blockchain technology, a kind of decentralised ledger that records all transactions. When someone sends bitcoin, the transaction is sent out into the network, where it is verified by various nodes. These transactions are collected in blocks. Miners are special nodes that solve complex mathematical problems to verify transactions and add new blocks to the blockchain. For their work, miners are rewarded with new bitcoins. This process is known as mining. Once a block is validated, it is added to the existing blockchain. This chain of blocks is an immutable record of all transactions. The security of bitcoin is ensured by cryptographic techniques and the decentralised network. Any attempt to tamper with the blockchain would require immense computing power and is therefore virtually impossible.
Impact and influence of bitcoin
Since its introduction, bitcoin has had a significant impact on the financial and technology sectors. Bitcoin allows users to transfer value without intermediaries, which is particularly attractive in countries with unstable currencies or authoritarian regimes. The underlying blockchain technology has inspired a wide range of innovations across industries, including finance, supply chain management and digital identity. Many see bitcoin as a form of "digital gold", acting as a hedge against inflation and economic uncertainty. While bitcoin is recognised as legal tender in some countries, other governments are sceptical. The regulation of cryptocurrencies remains an ongoing global issue.
Bottom line
Bitcoin is more than just a digital currency; it is a revolutionary concept that has changed the way we think about money, finance and technology. Since its inception in 2009, it has become a significant economic and technological phenomenon that continues to drive innovation and debate. Whether as a store of value, an investment opportunity or a technological innovation, bitcoin has firmly established its place in the modern world.
