02/11/2021
Bitcoin as a Currency
Bitcoin is a digital, decentralized, peer to peer, pseudonymous currency based on
cryptography. If that sentence made no sense to you, don’t worry - I’ll break it
down for you.
Digital – Bitcoins exist only as code, they do not exist as anything
physical. People can (and have) made physical representations of Bitcoin,
but ultimately they are based in the digital world.
Decentralized – There is no central bank or institution that issues or
controls Bitcoin. It is a group of individuals all over the world who run the
program that keeps the monetary system running.
Peer to Peer – You control your own Bitcoin, and when you send
Bitcoin to someone else, it goes directly to them. There are no banks or
middlemen.
Pseudonymous – While all Bitcoin transactions are publically
viewable in an open ledger called the Blockchain (we’ll get to that later),
the sender and receiver are only known as a string of numbers and letters.
If you’re careful about your identity, using Bitcoins can be done
anonymously.
Based on Cryptography – The strength of Bitcoin as a digital
currency lies in the code, which uses strong cryptography to ensure that
the coins cannot be accessed without proper permission.
Bitcoin is the first digital currency that has these characteristics, and as a result it
is the first digital currency to become widely adopted on the internet. As of June
2013, it is handling nearly 60,000 transactions each day, and this number is
accelerating quickly
