So What is Bitcoin?
[Hi everyone. I’m Matt. In addition to being one of the newer members of the CBT Nuggets team, I am also one of the most enthusiastic adopters of Bitcoin. This will be the first post in a series detailing my foray into the crypto-currency realm, sharing all the information and insight I can muster, and hopefully learning the hard way so that you don’t have to.]
As you know, the hot new craze sweeping CBT Nuggets HQ these days is the digital peer-to-peer currency, Bitcoin. And unlike Furbys, pogs, and snap bracelets, we think that this one has some legs.
For those of you who are unfamiliar, bitcoins are units of currency that are generated, transmitted, and stored digitally.
As a concept you will find that bitcoin is one part gold, one part PayPal, and one part dollar, combining the strengths of all of these things while eliminating some of the drawbacks of each. Based on open source software of the same name, Bitcoin allows for completely secure transactions and monetary supply carried out by a networked collective, with no central authority.
Public-key cryptography, proof-of-work processing, and universally shared record-keeping makes double spending or “counterfeiting” a virtual impossibility. Users get a fast, convenient, anonymous and above all safe way to send and receive funds, while it allows merchants to avoid charge fraud, pay reduced fees, and accept payment from anywhere on the planet.
For this post, let’s just focus on clarifying some things:
Bitcoin (capital “B”) = the concept, protocol, and network of users that make up the peer-to-peer currency
bitcoin (lower-case “b”) = the unit of currency itself (i.e. “I have 15 bitcoins”), often abbreviated by the 3-letter currency code “BTC”
This ‘crypto-currency’ was born in 2009 when the original software was released by the anonymous coder working under the pseudonym of “Satoshi Nakamoto.” In his honor, the smallest divisible unit of a bitcoin is called a “Satoshi.”
The goal of Bitcoin was to provide fast, low-cost, universally available method of sending and receiving money, where the transfer and creation of currency was not subject to any central authority.
In my next post: Where do bitcoins come from? How can I get some?