What is Bitcoin?
In a nutshell, Bitcoin is a cryptocurrency. Created in 2009 by an individual or group known as Satoshi Nakamoto, Bitcoin is the world’s first widely adopted cryptocurrency and currently the largest one by market cap.
Bitcoin is a product of technological transformation in the global financial system, a digital currency that exists and can only be traded online.
But similar to the foreign exchange market, the crypto market is decentralized, meaning no government, bank, or other authoritative body controls it. Instead, cryptocurrency trading is operated by computers spread worldwide.
When you use Bitcoin to purchase a particular item, that transaction goes to the blockchain, a digital ledger consisting of entries that can’t be easily changed or deleted by anyone.
With the Bitcoin supply capped at 21 million, a new Bitcoin is created every ten minutes through mining, which is similar to mining for gold, only it is done via a computer, and instead of gold, you’re looking for proof of work.
A proof-of-work activity involves solving complex mathematical problems. Here, you, the miner, race against other miners to verify the new block containing recent transactions.
The first miner to solve the problem is rewarded with a certain number of Bitcoin.