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  1. Home
  2. Akademia
  3. 1.08 What is Bitcoin?
  • 1.01 This is why you can no longer ignore cryptocurrencies
  • 1.02 What are cryptocurrencies?
  • 1.03 Cryptocurrencies vs fiat money: similarities and differences
  • 1.04 Cryptocurrency coins vs tokens: what is the difference?
  • 1.05 Storing crypto: where and how?
  • 1.06 Understanding crypto wallet terms
  • 1.07 Best practices to keep your crypto safe
  • 1.08 What is Bitcoin?
  • 1.09 How Bitcoin price is defined
  • 1.10 Sending and receiving Bitcoin
  • 1.11 What is Bitcoin halving?
  • 1.12 Understanding Bitcoin nodes
  • 1.13 Can Bitcoin network be hacked?
  • 1.14 The fundamentals of altcoins
  • 1.15 The basics of blockchain technology
  • 1.16 Blockchain use cases
  • 1.17 What is mining in blockchain?
  • 1.18 How do mining pools work?
  • 1.19 Bitcoin mining difficulty & pre-mined coins
  • 1.20 What is Ethereum and how does it work?
Previous lesson

1.08 What is Bitcoin?

In this lesson, we dig deep into the roots of the crypto and blockchain tree - Bitcoin.

article
Zonda Team
14 enero 2022
10 marzo 2022



If cryptocurrencies and blockchain applications are the branches and fruits, Bitcoin is the very root of this entire industry tree. While attempts at digital currencies have been made in the past, Bitcoin is the first successful cryptocurrency that has attained remarkable success and popularity. Today, tens of thousands of digital assets exist in the market; however, Bitcoin leads the crypto market dominance to date. 

Over the next few lessons, we go over Bitcoin’s fundamentals and features to better understand its value as a digital asset. 

In this lesson, we dig deep into the roots of the crypto and blockchain tree - Bitcoin.  

Contents

  • What is Bitcoin?
  • The origin of Bitcoin 
  • Unique features of Bitcoin

What is Bitcoin?

Bitcoin is a form of digital currency that allows you to buy, sell, or exchange directly without relying on intermediaries like banks and other financial institutions. 

Bitcoin, the most popular cryptocurrency, is the first real-time application of blockchain technology. It paved the way for all other alternative coins or altcoins. As Bitcoin exists only on the internet, it is also called digital currency. 

The transactions of Bitcoins are recorded and stored on a decentralized public ledger. 

In other words, the ledger and the network are managed and operated by the nodes (participants) of the Bitcoin blockchain. The Bitcoin network does not have any gatekeepers and hence anyone across the globe can become a member of the blockchain without seeking any permissions. 

The cryptographic methods used to create this digital currency ensure that there are no loopholes to double-spend Bitcoin. In other words, one Bitcoin can never be spent twice. 

Origin of Bitcoin

After the global financial crisis in 2008, an anonymous person or an institution issued a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. It was published on 31 October 2008 under the pseudonym “Satoshi Nakamoto.”

In early 2009, open-source software was released for developing Bitcoin. It is a permissionless network; hence, anyone can join the software and participate in its development. The first-ever transaction took place in January 2009 between Nakamoto and one early adopter of Bitcoin. 

The main purpose behind creating Bitcoin is to enable a peer-to-peer or person-to-person global payment without depending on any third-party institution like banks and brokerages. 

According to the original white paper, Bitcoin is a way to send money from one party to another without going through a financial institution. When it was first introduced, the value of Bitcoin was $0 in 2009. The price of Bitcoin has increased tremendously after a decade of its inception. 

Based on the source code used to create Bitcoin, it has a finite or limited supply. The total supply of Bitcoin has a limit of 21 million coins. The supply is expected to reach its limit by the year 2140. 

Unique features of Bitcoin

Bitcoin - the world’s largest cryptocurrency by market cap - encompasses unique features within its architecture. 





Easy to set up

Suppose you want to create a bank account, credit checks, and dealer records. In that case, you need to go through a lengthy procedure like filling the application form, verification of details, inquiries, etc. 

In the case of Bitcoin, anyone can join its network. All you have to do is download and run a Bitcoin client which connects to other nodes. 

Decentralized

The primary aim of Bitcoin’s founder, Satoshi Nakamoto, is to eliminate intermediate financial institutions like banks and brokerages to make a transaction. 

Bitcoin is a decentralized digital currency that maintains a distributed public ledger to record and store transactions. Any central authority like the government has no control over the Bitcoin network. 

Transparency

The Bitcoin network is transparent. You may not know how many Bitcoins a person owns, but you can view details of the transaction information like sender, receiver, and the amount under the respective public address. 

The transactions are transparent and can be viewed by any member of the Bitcoin public blockchain network. 

Anonymous

Banks know every detail of their users like name, address, phone number, legal papers, history of transactions, etc. They have access to information including date, time, amount, and the receiver of a transaction. 

In the Bitcoin network, your identity remains completely anonymous. It is possible to identify the wallet address behind transactions, but you cannot link the identity of the address to the user. 

Going a step further, Bitcoin is a decentralized network. However, centralized exchanges offering the services to buy and sell digital currencies need to comply with regulatory rules such as KYC and AML. Legal compliance adds a security layer against bad actors. 

Speed

Bitcoin transactions are near-instant and take a few minutes to complete irrespective of geographical location and time. 

Irreversibility 

Bitcoin transactions are irreversible. In other words, once you have sent a Bitcoin to someone, it is impossible to reverse the transaction. 

This lesson covered the basics of what Bitcoin is. In our upcoming lessons, we decode this cryptocurrency into further detail. 

ES

This material does not constitute investment advice, nor is it an offer or solicitation to purchase any cryptocurrency assets.

This material is for general informational and educational purposes only and, to that extent, makes no warranty as to, nor should it be construed as such, regarding the reliability, accuracy, completeness or correctness of the materials or opinions contained herein.

Certain statements in this educational material may relate to future expectations that are based on our current views and assumptions and involve uncertainties that could cause actual results, performance or events to differ from those statements.

BB Trade Estonia OU and its representatives and those working directly or indirectly with BB Trade Estonia OU do not accept any liability arising from this article.

Please note that investing in cryptocurrency assets carries risks in addition to the opportunities described above.

Next lesson

1.09 How Bitcoin price is defined

1.09 How Bitcoin price is defined
Previous lesson
16 / 1 / 22
Essentials
Economics
Investing

2.04 Understanding market capitalization

This lesson centers on understanding cryptocurrency market capitalization.

Sigue leyendo
2.04 Understanding market capitalization
16 / 1 / 22
Essentials

2.03 Common crypto trading terms

This lesson is a compilation of the most commonly used crypto trading terms.

Sigue leyendo
2.03 Common crypto trading terms
16 / 1 / 22
Bitcoin
Altcoin
Essentials

2.01 Why to invest in cryptocurrencies

This lesson explains why cryptocurrencies might be a good asset to include in your investment portfolio.

Sigue leyendo
2.01 Why to invest in cryptocurrencies
14 / 1 / 22
Essentials
Trading
Investing

2.07 Measuring market depth and liquidity

This lesson explains market depth, market liquidity, and volatility.

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2.07 Measuring market depth and liquidity
14 / 1 / 22
Essentials
Trading
Investing

2.08 Three major types of trade orders you need to know

This lesson explains three major types of trade orders and how they work. 

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2.08 Three major types of trade orders you need to know
14 / 1 / 22
Essentials
Trading
Investing

2.09 Fundamental and technical analysis for crypto trading

This lesson focuses on explaining how fundamental and technical analysis will help you assess cryptocurrencies.

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2.09 Fundamental and technical analysis for crypto trading
14 / 1 / 22
Essentials

2.10 Bull markets vs Bear markets

This lesson explains bull and bear markets and what you can do in each case.

Sigue leyendo
2.10 Bull markets vs Bear markets
14 / 1 / 22
Bitcoin
Economics

1.09 How Bitcoin price is defined

This lesson helps you understand what determines the price of Bitcoin.

Sigue leyendo
1.09 How Bitcoin price is defined
14 / 1 / 22
Bitcoin
Essentials

1.10 Sending and receiving Bitcoin

In this lesson, we explain how to send and receive Bitcoins.

Sigue leyendo
1.10 Sending and receiving Bitcoin
13 / 1 / 22
Bitcoin
Blockchain

1.11 What is Bitcoin halving?

This lesson takes you through the concept of Bitcoin halving.

Sigue leyendo
1.11 What is Bitcoin halving?
13 / 1 / 22
Bitcoin
Blockchain

1.12 Understanding Bitcoin nodes

This lesson explains what a Bitcoin node is and the different types of nodes.

Sigue leyendo
1.12 Understanding Bitcoin nodes
13 / 1 / 22
Bitcoin
Safety
Blockchain

1.13 Can Bitcoin network be hacked?

In this lesson, we discuss why it is nearly impossible to hack the Bitcoin blockchain.

Sigue leyendo
1.13 Can Bitcoin network be hacked?
13 / 1 / 22
Altcoin
Essentials

1.14 The fundamentals of altcoins

In this lesson, you learn about the fundamentals of altcoins.

Sigue leyendo
1.14 The fundamentals of altcoins
13 / 1 / 22
Altcoin
Essentials
Ethereum

1.20 What is Ethereum and how does it work?

This lesson helps you decode Ethereum thoroughly.

Sigue leyendo
1.20 What is Ethereum and how does it work?
13 / 1 / 22
Bitcoin
Blockchain

1.19 Bitcoin mining difficulty & pre-mined coins

This lesson covers two concepts - Bitcoin mining difficulty and pre-mined coins.

Sigue leyendo
1.19 Bitcoin mining difficulty & pre-mined coins
13 / 1 / 22
Bitcoin
Blockchain

1.18 How do mining pools work?

This lesson explains the function of mining pools in detail.

Sigue leyendo
1.18 How do mining pools work?
13 / 1 / 22
Essentials
Safety

1.07 Best practices to keep your crypto safe

This lesson provides you with valuable tips and tricks to keep your cryptocurrencies safe.

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1.07 Best practices to keep your crypto safe
13 / 1 / 22
Bitcoin
Blockchain

1.17 What is mining in blockchain?

This lesson will explain the basics of the cryptocurrency mining process.

Sigue leyendo
1.17 What is mining in blockchain?
13 / 1 / 22
Essentials
Safety
Wallet

1.06 Understanding crypto wallet terms

In this lesson, we take a deep dive into crypto wallet terms like public and private keys, wallet address, and ...

Sigue leyendo
1.06 Understanding crypto wallet terms

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