Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
How does Bitcoin work?
Bitcoin is decentralized. That means it is not controlled by any single entity. Bitcoin is also pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses.
Bitcoins are created through a process called mining. Miners are rewarded with bitcoins for verifying and committing transactions to the blockchain. Bitcoin miners are also responsible for the creation of new bitcoins.
What are the benefits of Bitcoin?
Bitcoin has several advantages over traditional currency. Bitcoin is decentralized, meaning it is not controlled by any single entity. Bitcoin is also pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Lastly, bitcoins are deflationary, meaning that their value in terms of traditional currency tends to increase over time.
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