What is Bitcoin?
Bitcoin is a global peer-to-peer network, that doesn’t rely on a central authority, is open to everyone 24/7, is transparent and is censorship resistant. It can be used as a payment network, a store of value, and to a lesser extent as a data storage solution.
Initially: the Bitcoin protocol
Bitcoin with a capitalized “B” is an open-source computer software, freely accessible by whoever wishes to, created by Satoshi Nakamoto in 2008. This name is a pseudonym, the identity of the creator remains unknown to this day.
Any IT professional can analyze Bitcoin’s code, ensure that it contains no loopholes or backdoors, or suggest improvements. Hundreds of programmers contribute daily to its evolution and the tools to interact with it.
The Bitcoin blockchain
Bitcoin toujours avec un grand “B” est aussi un registre, qu’on appelle la blockchain Bitcoin, dont le rôle est de stocker toutes les transactions ou informations qui ont lieu sur le réseau. Ce registre possède deux particularités fondamentales : il est distribué, c’est-à-dire que des milliers de copies synchronisées via un réseau informatique pair-à-pair existent dans le monde entier, et il est immuable, ce qui signifie qu’aucune donnée stockée sur la blockchain Bitcoin ne peut être altérée ou supprimée.
Bitcoin, still with a capitalized “B”, is also a ledger called the Bitcoin blockchain whose role is to store all transactions or information that take place on the network. This registry has two fundamental characteristics: it is distributed, i. e. thousands of synchronized copies via a peer-to-peer computer network exist worldwide, and it is immutable, which means that no data stored on the Bitcoin blockchain can be altered or deleted.
These two characteristics of the blockchain give it extreme robustness against computer attacks and censorship attempts.
A transaction validation mechanism called Proof-of-Work is defined in the program to validate transactions pending addition to the blockchain and ensure their immutability. It remunerates actors devoting computing power to secure the network through monetary creation. We are talking about mining operations.
Satoshi Nakamoto is the first person to have found a solution that combines blockchain technology, cryptographic techniques, and game theory in an open-source program to create a coherent and extremely secure system.
Bitcoins are the units of value of the network
Bitcoins, with an uncapitalized “b”, are the units of value generated by the protocol for miners who secure the network. Their particularity is to be the first rare digital asset, which cannot be duplicated and can be help by an individual without the help of a third party. It is these digital assets that we are talking about when we talk about buying bitcoins. Duplication of digital assets was the major obstacle that had hitherto stood in the way of the creation of a digital currency without central authority.
Bitcoin gives real control to the user
Bitcoins are secured by cryptographic keys generated by Bitcoin wallets. In addition to managing these keys, these software programs allow the reception and sending of bitcoins by their owners. It is important to understand how Bitcoin wallets work, and determine which wallet best suits your needs.
Apart from the owner of the keys, no one has the possibility to block an account, initiate a transaction, or perform any type of action on the bitcoins. We are facing a new form of digital property here.
Bitcoin’s monetary creation is predictable
On January 3, 2009, the day the network was launched, 50 bitcoins were generated by miners every ten minutes on average. The program stipulates that the rewards of minors through monetary creation is halved every four years. The next division, or “halving”, will take place around May 2020. We will then go from 12.5 to 6.25 bitcoins created every ten minutes. Following this scheme, a maximum of 21 million bitcoins will be in circulation by the year 2140.
17.9 million units are currently in circulation, but in a decade we will already have reached 20 million.
Bitcoin is rare, but highly divisible
21 million units for 7 billion people may seem insufficient if Bitcoin wants to establish itself as a means of exchange that can be used by everyone on a daily basis, but this is a false problem. Bitcoin units are currently divisible up to eight decimal places, and it is possible to go even further if necessary.
In honor of its creator, the smallest unit in the system is called the satoshi. A bitcoin is therefore equal to 100,000,000 satoshis.
Unlike a currency controlled by a central bank which can determine an interest rate, the Bitcoin price is fixed, as for commodities or precious metals, only by supply and demand. There are trading platforms on which a significant number of transactions are carried out each day, making it possible to set a price.
Today, Bitcoin is still an emerging technology and its capitalization is low compared to traditional financial assets, which is why it remains highly volatile.
At the time of writing, on 16 April 2019, you are offering yourself 0.022 Bitcoins, or 2,218,097 satoshis for 100 euros. But this is changing rapidly. So, to become satoshi-millionaire, even satoshi-millionaire, click here !
Simply put, Bitcoin is an innovative payment network and a new form of money. This technology is anchored in the dynamics initiated by the Internet, which has enabled the decentralization of information and the instantaneous nature of communications around the world. Bitcoin, on the other hand, brings the decentralization of value exchanges and the instantaneous nature of transactions worldwide.