What is Bitcoin and How does it Work?


What is Bitcoin and How does it Work?

Bitcoin is the first digital currency and is believed to be invented by Satoshi Nakamoto in 2009. No one knows who is Satoshi Nakamoto, some believed it to be a group of developers who first coded the blockchain behind Bitcoin.

Bitcoin uses rules of cryptography for the regulation and generation of units of currency.

It falls under the scope of cryptocurrency and was the first and most valuable among them. It is commonly called a decentralized digital currency i.e. any bank or government does not control it.

To be more precise, as per the Bitcoin community, “Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.

Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.”

Bitcoin has a value that is self-contained just like bits of gold in your pocket.
The value increases or decreases with the demand on trading.

Bitcoin lifecycle can be understood better with the below image.