Bitcoin is digital money, it is money just like the Ghana Cedi (GHS) but instead of a paper and coin-based form of currency, Bitcoin is virtual.
Bitcoin allows us to send money globally, from any point of the world to another point securely and instantly with very minimal fees.
In this article, we explain the very basics of bitcoin and how it works.
Bitcoin is a protocol that operates on mathematical rules allowing users to make transactions that are secure and difficult to fake. Bitcoin was mentioned in 2008 and launched in 2009 by Satoshi Nakamoto, an anonymous programmer.
The History of Bitcoin
Bitcoin was first mentioned in 2008 by “Satoshi Nakamoto”, an anonymous programmer who published a whitepaper that described a digital currency that was based on a decentralized network that could come to a consensus without a central authority.
Satoshi Nakamoto released software based on his whitepaper in January 2009 to establish the Bitcoin network. Bitcoin is a protocol that operates on mathematical rules allowing users to make transactions that are secure and difficult to fake.
Bitcoin had absolutely no value for the first eight months of its existence until The New Liberty Standard published 1,309.03 BTC = GH¢5.36 ($1 USD).
At this point, Bitcoin was used by cyberpunks and computer programmers who began to trade Bitcoin amongst themselves for money and other things of value on the internet.
The first Bitcoin online exchange was established in 2010. MtGox allowed people to trade (buy and sell) Bitcoin (BTC).
On May 22, 2010, Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas. Hanyecz reached out for help on Bitcointalk (a Bitcoin online forum) with the message: “I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some leftover for the next day,”.
Hanyecz’s wish got granted and the first major purchase with Bitcoin was recorded. Every 22nd May has been celebrated as Bitcoin Pizza Day since.
Bitcoin began to gain popularity over the years, becoming a hot topic for debates on the future of money and finance. A foundation was set up in September 2012 to promote the development of Bitcoin.
Meetups, conferences, and seminars began to spring up promoting the new invention globally.
Bitcoin Explained
Bitcoin is digital money, it is money just like the Ghana Cedi (GHS) but instead of a paper and coin-based form of currency, Bitcoin is virtual. Bitcoin allows us to send money globally, from any point of the world to another point securely and instantly with very minimal fees.
Bitcoin is not controlled by any government. All parameters on the distribution (when and how much Bitcoin is released to the world) and functions are designed in the codebase. New Bitcoin is produced by individuals who solve complex mathematical equations to secure transactions.
Bitcoin has unique features that make it better than traditional currencies, including:
1. Bitcoin is decentralized:
Bitcoin is not controlled or issued by any single authority but instead, the network is run globally by all who are interested with various rules like distribution and issuance of the currency all provided in the code. Bitcoin is not controlled by a Central Bank, users send money to each other in a peer to peer manner.
2. Bitcoin is secure:
Bitcoin allows secure payments. Transactions are guarded by military-grade cryptography. Nobody can take your money or make a payment on your behalf provided you have full control over your wallet.
3. Bitcoin is anonymous:
Bitcoin transactions are normally anonymous because addresses are not tied to your name. Unlike bank accounts and mobile money wallets that are tied to your name and other details, Bitcoin payments can be made without attaching your personal details. This enables you to make private transactions that cannot be tracked.
4. Bitcoin transactions cost less:
Bitcoin transactions cost less than payments through traditional means. With Bitcoin, you don’t pay several fees like bank accounts where sometimes you have to pay a fee for deposits, withdrawals, and transactions. With bitcoin, you pay a relatively lower fee only when you a making a transaction.
Now that you know what bitcoin is, learn how to store your bitcoin. Ready To Earn Your First Bitcoin? Read Our How To Earn Free Bitcoin piece.
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