The invention of Bitcoin came as a peer-to-peer system to facilitate online payments that don’t call for a trusted central authority. Bitcoin was invented in 2008 and since then, it has grown into a currency, technology, a community of users, and an investment vehicle. This post will explain what Bitcoin is, how it works, and how it can improve your life.
So, What Is Bitcoin?
The challenging part of any digital payment system is to prevent one from being able to spend the same money more than once. Since the Bitcoin is a digital payment system, it can be copied over and over again if appropriate measures are not taken. Traditionally, digital payments are made through trusted central authorities such as PayPal for the purpose of verification of all the transactions.
However, Bitcoin is a special digital payment system that uses consensus in a massive P2P (Peer-to-Peer) network to authenticate all the transactions. This innovation results in a system where accounts cannot be frozen or payment reversed.
The Origin of Bitcoins
This will be explained in details later in this site in the topic about mining. However, here is a simple explanation of where the Bitcoins came from; some users used their computers to verify transaction in the peer-to-peer network known as Bitcoin. The users were rewarded with new Bitcoins that were equal to the amount of computing power they donated to the Bitcoin network. This is where the idea of this digital payment system came from.
Who Controls Bitcoin?
As aforementioned, Bitcoin is not controlled by any central authority or central person; in short, no one is in charge of Bitcoin. Several programmers develop the open source Bitcoin software voluntarily and make amendments subject to the approval of Gavin Andresen, the lead developer. The miners then decide whether to accept and install the updated version of the software or stick to the older one. They vote using their processing power. The miners best interest is only to accept the changes that will benefit the Bitcoin currency in the long run. It is these checks and balances that make it hard for an individual miner to manipulate Bitcoin.
How to Use Bitcoin
The best way to get started is to get some Bitcoins and experiment. Our site has detailed resources that can guide you about how to set up your Bitcoin wallet, how to use Bitcoins, how to acquire Bitcoins, and much more. We have written about various topics revolving around Bitcoins which you can use to learn more about Bitcoins. If you have any questions that might not have been answered in this post, please contact us, and we will be more than willing to help where can.