What is Bitcoin?

Before we understand what, is bitcoin and how it works? We must know why bitcoin was created?

Bitcoins is created to cut the middleman (Bank) from the transaction process. To understand this let’s take an example assume you want to send money to your friend who is in U.S. Now to send money it go through a bank in your country. Here now bank take fee for processing. Once the money reaches the bank in U.S. Now the friend’s bank will charge fee too. Now let assume it’s ok they take fee that’s not a problem. But bank store lots of personal data about their customer. Before the invention

of Bitcoins. Many banks where been hacked during this period of time. Which is very dangerous for the people that use the bank because their privacy is at risk. So this how bitcoin was introduced.

So, now let’s see what is Bitcoin?

In laymen’s term:

Bitcoin is a digital currency. That’s a concept that might be more complex than you realize , it isn’t simply an assigned value of money stored in digital account, like your bank account or credit line .Rather than that its basically a computer file which is stored in “digital wallet” app on a computer or mobile.

Bitcoin is block of ultra-secure data that are treated like money. Moving this data from one person to another and verifying the transaction, i.e. spending the money.

In Technical term:

Bitcoin was released in 2009 by a unknown person or a group with the name of “Satoshi Nakamoto “.The domain name “bitcoin.com” was register on 18 August 2008.On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash system was posted to a cryptography mailing list.

How Bitcoins are created?

New Bitcoins are generated by a competitive and decentralized process called “mining”.

“Bitcoin mining “is vast topic. So, we will discuss in some other blog. So, for now we will see it in laymen term.

In laymen’s term: New Bitcoin are created by solving the mathematical equation called “blocks”, which are created every time there is bitcoin exchange.

Interesting Fact: There are only 21 million bitcoins that can be mined in total.

Last estimated year when all the bitcoin will be mined is 2140.