The Bitcoin

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What is Bitcoin?

Bitcoin is a form of digital money that you can use to pay just like you do with Euros or Dollars. With bitcoins you do not need a third party such as a bank to send money to each other or buy goods. The bitcoin is the first Cryptocurrency that has come on the market. The goal of the bitcoin was to develop a ‘peer-to-peer electronic cash system’ where double spending of money is impossible.

Who made the Bitcoin?

The mysterious person behind the bitcoin with the name Pseudonym Satoshi Nakamoto is still unknown. In 2008, Satoshi Nakamoto launched the bitcoin with a corresponding whitepaper:
The benefits of Bitcoin.

– Peer-to-peer system. This means that no third parties are required. Example: peer 1 (Jake) sent money to peer 2 (May).
– Transaction times are direct. You no longer have to wait 2 days for your transactions.
– Anonymity.
– Independent of governments, countries, censorship or restrictions.
– Usable worldwide.
– Low transaction costs
– There is a limited number of bitcoins (21 million).

How do Bitcoins arise?
Bitcoins arise trough Mining. Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle.  The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards.  The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.