Bitcoin is a decentralized digital currency, launched in 2009 by an individual or group under the pseudonym Satoshi Nakamoto. It operates on a peer-to-peer network and uses blockchain technology, a public and immutable ledger, to record transactions. This innovation eliminates the need for intermediaries like banks or governments, allowing users to transact directly and securely.
Key Features of Bitcoin:
1. Decentralization: No central authority controls Bitcoin, making it resistant to censorship and interference.
2. Limited Supply: Bitcoin's supply is capped at 21 million coins, making it deflationary and often referred to as "digital gold."
3. Transparency: All transactions are recorded on the blockchain, accessible to anyone, ensuring accountability.
4. Security: Transactions are secured through cryptographic methods, and miners validate them via the Proof-of-Work (PoW) consensus mechanism.
5. Pseudonymity: While transactions are public, the identities behind wallet addresses remain private unless voluntarily disclosed.
How Bitcoin Works:
1. Wallets: Users store Bitcoin in digital wallets, which generate private and public keys for transactions.
2. Transactions: When sending Bitcoin, the transaction is broadcast to the network and validated by miners.
3. Mining: Miners solve complex mathematical puzzles to validate transactions and add them to the blockchain. Successful miners are rewarded with newly minted Bitcoin and transaction fees.
