What is Bitcoin (BTC)?
Bitcoin is a decentralized cryptocurrency that was originally described in a 2008 whitepaper by one person or group of people, using the alias Satoshi Nakamoto. Bitcoin launched shortly thereafter in January 2009.
Bitcoin is a peer-to-peer online currency, meaning that all transactions occur directly between independent, equal network participants without any intermediaries enabling or facilitating them. According to Nakamoto, Bitcoin was created to allow “online payments to be sent directly from one party to another without going through a financial institution.”
There have been concepts of a similar decentralized cryptocurrency that existed before BTC, but Bitcoin has the distinction of being the first cryptocurrency to be actually used.
Who is the founder of Bitcoin?
The original inventor of Bitcoin is known as Satoshi Nakamoto. As of 2020, the true identity of the individual — or organization — behind this name remains unknown.
On October 31, 2008, Nakamoto published Bitcoin’s whitepaper, which detailed how a peer-to-peer online currency could be implemented. They proposed using a decentralized ledger of transactions packaged in batches (called “blocks”) and secured with cryptographic algorithms – the entire system would later be named “ blockchain.”
Just two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, called the genesis block, and thereby launched the world’s first cryptocurrency.
However, although Nakamoto was the original inventor of Bitcoin, and author of the first implementation of the currency, many people have contributed to improving the software of this cryptocurrency over the years by patching vulnerabilities and adding new features.
The Bitcoin source code repository on GitHub lists over 750 contributors, with some of the key individuals being Wladimir J. van der Laan, Marco Falke, Pieter Wuille, Gavin Andresen, Jonas Schnelli, and others.
What makes Bitcoin unique?
Bitcoin’s most unique advantage comes from the fact that it was the first cryptocurrency to hit the market.
Bitcoin has found a way to create a global community and spawn a whole new industry with millions of people passionate about creating, investing, trading and using Bitcoin and other cryptocurrencies in their daily lives. The emergence of the first cryptocurrency created a conceptual and technological base. It has since inspired the development of thousands of competing projects.
The entire cryptocurrency market – now worth more than $300 billion – is based on the idea materialized by Bitcoin: money can be sent and received by anyone, anywhere in the world without depending on trusted intermediaries, such as banks and financial services companies.
Thanks to its pioneering nature, BTC remains at the top of this dynamic market after over a decade of existence. Even after losing its undisputed dominance, Bitcoin remains the largest cryptocurrency, with a market capitalization ranging between $100 and $200 billion in 2020, largely due to the popularity of platforms that provide use cases for BTC: wallets, exchanges, payment services, online games, etc.
How many Bitcoins are in circulation?
The total supply of Bitcoin is limited by the software and will never exceed 21,000,000 coins. New coins are created in the process known as “mining”: as transactions are forwarded on the network, they are picked up by miners and packaged into blocks, which are then protected in turn by complex cryptographic calculations.
To compensate for the computational resource usage, miners will receive a reward for each block they successfully add to the blockchain. At the time of Bitcoin’s launch, the reward was 50 bitcoins per block: this was halved with every 210,000 new blocks mined – this process took place on the network for about four years. As of 2020, the block reward has halved three times and is now 6.25 bitcoins.
Bitcoin is not pre-mined, which means that no coins are mined and/or distributed among the founders before Bitcoin is made available to the public. However, during the first few years BTC existed, competition among miners was relatively low, allowing the earliest network participants to amass substantial amounts of coins through regular mining: Satoshi Nakamoto alone is said to own over a million Bitcoins.
How secure is the Bitcoin network?
Bitcoin is secured with the SHA-256 algorithm, which belongs to the SHA-2 family of hash algorithms, used by the Bitcoin Cash (BCH) fork, as well as several other cryptocurrencies.