What is bitcoin, the most popular crypto-currency?
Of course, you’ve heard of bitcoin. And that’s why you’re on my website today. Because you want to know what are bitcoins, the coins everybody’s talking about. Indeed, maybe bitcoin is a good opportunity for you to start investing in crypto-currencies.
Bitcoin, the first cryptocoin
I know my site is about finding the best alternative to bitcoin. But I have to talk about the mother of all cryptocurrencies too. So what is the bitcoin definition? To keep it simple, it’s a decentralized digital currency system. Therefore, there’s no central authority to manage the creation and transactions of coins. And to operate, Bitcoin relies on a database managed by all users: a block chain.
The security of the transactions is ensured by a system of mining, based on a cryptographic algorithm. Furthermore, users are financially motivated to offer the power of their computer to the network. Thus, they can validate that no one is cheating during the transactions.
The funds are materialized by virtual keys, contained in wallets.
This digital currency is only a few years old. Indeed, Satoshi Nakamoto mined the first block, or genesis block, on 3 January 2009. But bitcoin is getting more and more popular for the last couple of years. And its price literally rose through the roof.
So who is the mysterious Satoshi Nakamoto? Nobody knows. And the community of bitcoiners keeps wondering about it. Indeed, this name refers to a person (or a group of people for all we know) who worked on the bitcoin blockchain from 2007. At the time I write this article, we estimate he’s now worth over 1 million bitcoins…
What are the advantages of bitcoin?
First of all, it’s highly secure. Indeed, to hack the bitcoin you would need to hold more than half of the existing tokens (more than 10.5 million bitcoin). While many people have already tried, no one has hacked the system yet! Also, the more blocks the harder it gets to hack…
Second, transaction costs are minimal. And they’re invoiced by the network in order to encourage miners to take advantage of the computing power of their machine.