Bitcoin is credited as the original and most well-known cryptocurrency. A person or group of people created it under the name Satoshi Nakamoto in 2009. It was intended to be used as a payment method free from government supervision, transfer delays or transactions fees. However, bitcoin is not yet widely accepted for all transactions as some consider it too volatile to be a suitable payment method.
How does bitcoin work?
Bitcoin relies on two underlying mechanisms to function – the blockchain and the mining process.
What is the blockchain?
The blockchain is a shared digital ledger that holds a record of all bitcoin transactions. Each cryptocurrency transaction is grouped into ‘blocks’ by miners.
The transactions are then cryptographically secured before they are added to the existing blockchain. Each ‘node’ or computer connected to the network automatically downloads a copy of the blockchain, allowing everyone to track transactions without central recordkeeping.
The blockchain is accessible to everybody at any time and can’t change the shared records without the agreement of the rest of the network.
For more information, please visit their website at https://bitcoin.org.