Bitcoin, as we are already aware, is a type of digital currency, which was created and is being made use of electronically. No single person or an authority control it. Bitcoins are not printed like rupees or euros – and are produced by many people simultaneously thus running the computers all around the world making use of specialized software that does solve mathematical problems. Bitcoin is the foremost example of an expanding category of money known as the cryptocurrency.
What is Bitcoin: How is it different from normal currencies?
One can use Bitcoin to buy things electronically. It is like conventional currency like euro, dollar etc. but is used electronically to purchase things.
The most important characteristic of Bitcoin and what specifically differentiates it from conventional money is that it is decentralized i.e. no one in a particular institution has complete control over Bitcoin network. Many people like this feature because they like the fact that no large bank can control their money.
What is Bitcoin: Who created it?
Bitcoin was created by Satoshi Nakamoto, who happens to be a software developer. The ideas were to have a currency that could be produced electronically and also be independent of any of the central authority and also be transferable instantly, with as low transaction fees as is possible.
What is Bitcoin: Who prints it?
No one. Bitcoin currency is not physically printed by any central authority like a bank and is unanswerable to the general public and has its own rules.
Bitcoin is rather produced digitally, by a community of people, which is also open to anybody. Bitcoins’ production by individuals is referred to as ‘Bitcoin mining’ and is done by utilizing computers in a distributed network. The network also does contain transactions that are made with Bitcoins, thus making Bitcoin its own payment network.
A Bitcoin can rather be divided into smaller portions. The smallest amount is one hundred millionth of a Bitcoin and is called ‘Satoshi’, the name of its creator.
What is Bitcoin: What is it based on?
Conventional money is based on silver or gold. You can hand over your money to get an equivalent amount of gold or silver, though in reality banks will not be handing out gold to you. Bitcoin, on the other hand, is based purely on mathematics.
What is Bitcoin: What are its characteristics?
There are several key characteristics that separate Bitcoin from normal flat currencies.
- Bitcoins are not stored by one central authority. So no one central authority can interfere with the working of Bitcoin and its policies
- Unlike a regular bank that requires one to fulfill many prerequisites and paperwork before opening even a simple bank account, with Bitcoin, it takes mere seconds to set up an account, not too many questions asked and no upfront dues required.
- Bitcoin is extremely stringent in storing the required details of every single transaction in a gigantic a ledger referred to as block chain.
- Bitcoin does not charge for international transfers. One can send money anywhere and see that it arrives in minutes, as soon as Bitcoin network finishes processing the payment.
