What is bitcoin?

In order to understand what bitcoin is, you must first understand what cryptocurrencies are.

In short, a cryptocurrency is a digital currency that is decentralized. This means that it does not have a single payment system or a body that would regulate its turnover.

Cryptocurrency does not have fiat money or commodities behind it, it does not have a physical expression (coins and banknotes) - in fact, it is a set of mathematical operations.

It is distinguished from other digital currencies by security and encryption by special algorithms. The main basis of cryptocurrencies is blockchain technology. All types of cryptocurrencies can be conditionally divided into three main types: bitcoin, altcoins (including stablecoins), tokens (including DeFi tokens). Each of the coins from these groups has its own characteristics, which you can read about in our detailed analysis.

By themselves, bitcoin and altcoins are not money in the usual sense, but a complex digital product with its own crypto-code and encrypted record. To get the status of money, even digital, they go through a complex mechanism of transformation and processing with the help of special technologies.

At the beginning of 2022, there are about 10,000 cryptocurrencies in the world. It is worth noting that many of them, for various reasons, do not work and have no value, that is, they are “dead coins”.

Bitcoin is the first and most popular cryptocurrency in the world.

Bitcoin (from English Bitcoin, from bit - bit and coin - coin) is a decentralized digital or cryptocurrency used in a payment system that operates on the Internet.

The project was launched in 2009. Nakamoto Satoshi is believed to be the creator of bitcoin, probably a programmer or a group of people.

In the Bitcoin system, the amount of currency is limited to 21 million coins - virtual points. The lower the demand and the number of participants, the easier it is to earn rewards in the system. With the increase in the number of users, the complexity of the tasks for which they are rewarded with bitcoins has increased. The "coins" used in the system are a unique computer code that cannot be randomly generated. So they are protected from forgery or other actions of intruders. The price of coins depends on supply and demand, and not on the number of participants in the system.

The main properties of bitcoin are: lack of a single control center, the possibility of transferring without intermediaries to any device connected to the Internet, with an installed wallet program, storing data on any transfer in the blockchain forever, user anonymity - only a digital address in the system is required for storage and transfer.