What is Bitcoin and what are its characteristics?
Great news! Bitcoin is way easier than what you would have thought. Our goal is to give you the keys so you can understand the basics of crypto-assets and their importance while pushing your knowledge via our blog so that these technologies won’t be a secret anymore for you. Let’s begin.
To put it simply, Bitcoin is a new form of money as it is the first system to propose peer-to-peer payments over the internet instantly and anywhere in the world. This technology follows the trend initiated by the internet, which allowed the decentralization of information and instantaneity of communications. Bitcoin brings the decentralization of transfers of value and instantaneity of transactions around the globe.
Thus, Bitcoin presents numerous innovative characteristics :
Bitcoin is decentralized, trustless and permissionless.
The network doesn’t have a central authority, which means that there is no institution, corporation or government that controls Bitcoin. Any user can become a “Node” of the network and independently verify the legitimacy of Bitcoin transactions. Each node has its own copy of the Bitcoin “Blockchain”. Hence, there is more than 10,000 copies of it around the world. The protocol is open-source which makes it retrievable by anyone who wants to look at it. Users can participate freely in the evolution of the technology by proposing upgrades to the protocol or building technologies on it. For the first time, money is backed by an extremely resilient platform.
Bitcoin is a peer-to-peer network.
For the first time in the digital world, you have the power to completely hold digital assets. You have total control over it and nobody can freeze or seize your funds against your will. When you make a Bitcoin transaction, you and the receiver are the only ones concerned by it and if your transaction is legitimate it will be accepted by the network no matter what. Bitcoin allows users to get rid of traditional third parties like banks and allows direct transfers of values between individuals.
Bitcoin is rare like a precious metal.
New units of bitcoin are produced every 10 minutes by a “mining” process and the quantity created is divided by two every 4 years. There will be no more than 21 million bitcoins in total. Every bitcoin is divisible down to 100 000 000 units called “satoshis”, but it will be possible to modify this division in the future to increase the number of satoshis without changing the hard-capped number of bitcoins. The last fractions of bitcoins will be mined around 2140!
Bitcoin is tamper-proof.
It relies on a public and distributed database called a “Blockchain,” which keeps track of all of the bitcoins transactions since its inception. It is strictly impossible to modify a bitcoin transaction if it has been recorded on the blockchain. Nodes verify the legitimacy of all transactions going through the network, so it is not possible to add a falsified transaction to the blockchain.
In conclusion, Bitcoin is borderless because it is internet-based, censorship-resistant thanks to its decentralized architecture, and accessible by anyone who has a simple internet connection.
This is only the tip of the iceberg, so keep on reading to learn more!