Disclaimer: This book is exclusively for educational purposes. Any financial decisions made by you, are at your own risk.
Bitcoin, a decentralized digital currency, has taken the financial world by storm. Created in 2009 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto, Bitcoin offers an alternative to traditional centralized currencies controlled by governments and financial institutions. Bitcoin operates on a peer-to-peer network, allowing users to transact directly with one another without the need for intermediaries.
At its core, Bitcoin is a digital form of money that exists solely in the digital realm. Unlike physical currencies such as banknotes or coins, Bitcoin is purely electronic, existing as a string of cryptographic code.
This digital nature provides several advantages, including increased security, efficiency, and borderless transactions.
Bitcoin’s underlying technology, known as blockchain, plays a pivotal role in its operation. Blockchain serves as a public ledger that records all Bitcoin transactions in a transparent and immutable manner. Each transaction is grouped into blocks and added to the chain chronologically, creating a permanent record of every transaction ever conducted.
To facilitate transactions, Bitcoin relies on a process called mining.
Miners, specialized computers within the network, perform complex mathematical calculations to validate and secure transactions. These calculations involve solving cryptographic puzzles, which not only validate the transactions but also maintain the security and integrity of the blockchain.
