Bitcoin is a digital asset with no physical representation, meaning that it has no fixed monetary value. The significance of Bitcoin is its status as a decentralized means of conducting transactions and data storage. Bitcoin utilizes a peer-to-peer network to authenticate transactions and store data. Its network is named after the first block, the Genesis Block, on the blockchain which was mined on the subject’s birthday (Nov. 30, 2008) by the pseudonymous Satoshi Nakamoto. Unlike other cryptocurrencies, Bitcoin is not being mined by a central entity; rather, the blockchain is a public ledger containing all transactions of every Bitcoin on the network. Transactions are verified through a process called “mining.” Some things to note about Bitcoin:
– Bitcoin is one of many cryptocurrencies
– Bitcoin has a finite number of units, or “coins”
– Bitcoin’s data storage is similar to that of a ledger, therefore, the same currency can be separated into smaller units, “satoshis”
While there are certainly many differences between Bitcoin and other cryptocurrencies, some notable similarities include:
– All currencies operate within a distributed system, providing a means of storing and transferring data
– All currencies are issued in denominations and have a finite supply
– All currencies are stored digitally through a public ledger
Below is a chart of the current value of the Bitcoin market as of 12/20/18:
Bitcoin Market Capitalization & $19B.
Bitcoin’s main competitor, Ethereum, has a market capitalization of $28.4B. This makes them the two largest digital currencies. Ethereum continues to be the second most valuable crypto due to the fact that they are one of the first cryptocurrencies to be programmable and a
Turing complete virtual machine.
Governments Seeking to Regulate Bitcoin.
In 2009, Bitcoin was released under a Creative Commons license, becoming open-source code. This has proven to be an essential feature of the cryptocurrency.
While many consider Bitcoin to be decentralized, it is regulated by the network. This is done through a Proof-of-Work algorithm where users are incentivized to add new blocks to the blockchain to gain rewards. As of December 2018, miners receive 12.5 BTC for creating a block (or 0.1 btc for each unverified transaction). This process makes the system self-sustaining by incentivizing miners to maintain the integrity of the blockchain.