Cryptopedia: Bitcoin

Bitcoin

Bitcoin is the first and most important cryptocurrency. The anonymous Satoshi Nakamoto invented and developed bitcoin, but Bitcoin is now completely decentralized. So there is not a company, person or country behind it that manages Bitcoin. People therefore sometimes compare it with a commodity such as gold. Like gold, Bitcoin is scarce, convertible and nobody owns it. Because Bitcoin is also useful for transactions and is more transparent, it is sometimes referred to as “gold 2.0”. You can buy bitcoin on an exchange or broker where you can also store it. You can also save your crypto without the help of a third party by storing your keys in a so-called wallet.

A more technical description is that Bitcoin is a peer-to-peer (P2P) payment network that uses (decentralized) blockchain technology. Bitcoin uses the Proof of Work method to secure the network. All transactions and public keys are registered on the bitcoin blockchain and are public. The public key is the Bitcoin address, which works much like a public email address. The private key is required to perform a transaction. A seed phrase (12 or 24 words) and gives access to a wallet where the private keys are stored.