What is Bitcoin?

Bitcoin is a digital currency developed to trade for goods or services. A Satoshi is the smallest unit of one Bitcoin that can be sent or transmitted on any transaction. Each Bitcoin is divisible to the 8th decimal place or one hundredth of a millionth of a Bitcoin (.00000001).

The Bitcoin token is produced through custom-made computer software (platform) which uses encryption to process, verify, and validate each transaction and a ledger to maintain permanent records. Its value is derived by the shared perception of freedom, privacy, and its ability to be shared through a Peer-to- Peer network (P2P) eliminating the need for intermediaries such as banks. It is decentralized, which means, there are no servers; it is not stored in a bank, issued, or regulated by any government or agency, and it only exists on the virtual world of the internet maintained through a network of shared computers called “Nodes”.

Bitcoins are created through a process called “Mining” where participants of the Bitcoin network use powerful computers to verify the validity and authenticity of all transactions. Transactions are sent in the form of an encoded mathematical problem and the miner that solves it, and thus confirms a transaction, gets issued a number of Bitcoins. By design, the number of Bitcoins issued is decreased every four years by half, so the total number of Bitcoins that will be produced will be 21 million. The last Bitcoin will be mined in 2140.

The mechanism used to record and maintain all the information is called a Blockchain. The Blockchain is a ledger, a register, a record book of transactions executed between members of the Bitcoin network. When a transaction occurs, this ledger is changed to reflect the changes; the entire network is updated and the balance of coins is accounted for.

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