What is Bitcoin?

Bitcoin is the world’s first purely electronic, peer-to-peer cryptocurrency, introduced by a group of people or an individual under the pseudonym – Satoshi Nakamoto in 2008 through a paper – Bitcoin: A Peer-to-Peer Electronic Cash System. Interestingly, the real identity of Satoshi was never revealed. Although, many have claimed to be Satoshi in recent years, none seemed convincing.

Bitcoin is an electronic form of currency in a way that its physical form does not exist. They are not printed like fiat currencies. It lives on the network merely as a state value. Being peer-to-Peer means there is no intermediary bank, financial institution or payment gateway through which transaction passes. And finally, transaction verification is done using cryptography, hence cryptocurrency.

Bitcoin has taken everyone by surprise with its skyrocketing value in the last few years. At the time of writing this article, the value of one Bitcoin is whopping USD 8,127.52/-. BTC, short for Bitcoin Currency, is the acronym for bitcoin cryptocurrency.

Bitcoin units and denominations

Bitcoin units and denominations are as follows:

Bitcoin – 1 BTC
DeciBit – 0.1 BTC
CentiBit – 0.01 BTC
MilliBit – 0.001 BTC
MicroBit – 0.000001 BTC
“Finney” – 0.0000001 BTC
“Satoshi” – 0.00000001 BTC

(source – Bitcoin Unit Denominations)

Please note the last 2 denominations of Bitcoin. Finney denomination is named after Hal Finney. He was an American computer science engineer who contributed immensely to the Bitcoin project and was the first person to received the first Bitcoin transaction from Satoshi.

Many have inferred that Hal Finney is Satoshi Nakamoto, but he always denied the claim. Naming the denomination after him is a token of respect shown by the Bitcoin community towards his work in the Bitcoin project.

The smallest unit of Bitcoin, Satoshi (or SAT, in short) is dedicated to the mysterious inventor of Bitcoin, apparently.

It’s interesting to note that unlike traditional currencies, the number of Bitcoins that will ever exist is fixed – 21 million Bitcoins. That is why we need smaller units of Bitcoin. If Bitcoin becomes mainstream currency in the future, then only a smaller number of people will own a full Bitcoin or more. The rest of us will transact in smaller denominations.

Bitcoin is global since anyone can be part of Bitcoin blockchain and send or receive Bitcoins. Bitcoin transactions, however, are irreversible. It means that if Bitcoins are sent to the wrong recipient, outside the goodwill of the person, its impossible to get it back. With no intermediary, Bitcoin transactions are fast and permissionless.

There has been speculation that Bitcoin is going to reach 1 million USD per Bitcoin in the near future. But the ride of Bitcoin has always been bumpy and uncertain. Whether it rises or falls, Bitcoin has made us realize that digital currency is now a reality and time has come to embrace it with open arms.

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