What is Bitcoin?
Bitcoin is a decentralized digital currency created by an unknown person(s) named Satoshi Nakamoto. No central authority or bank controls it. Instead, it uses peer-to-peer technology called blockchain in which transactions are managed by a collective network of miners.
Since nobody controls Bitcoin, everyone can take part. The technology is open-sourced and public. Bitcoin was created with the intent to become a better substitute to the current fiat monetary system. Read the original Bitcoin Whitepaper.
Terminology
- Decentralized: The removal of a centralized authority.
- Blockchain: The technology underlying Bitcoin, which acts as a public ledger using digital signatures and cryptography to store unalterable transaction records.
- Miners: Utilize computer power to solve complex mathematical problems to verify and log each transaction in the block, hence the word blockchain. In turn, they are rewarded in Bitcoin as incentive to continue to mine and uphold the network.
- Fiat currency: Legal tender issued and controlled by a government body, but is not backed by a physical commodity.