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What is bitcoin?
Bitcoin
Bitcoin is an electronic money that allows online payments directly between two people, without the intermediation of a financial institution, such as a bank. This was the definition given by Satoshi Nakamoto, the pseudonym of the person or group behind the cryptocurrency, in the whitepaper of the project, published at the end of 2008. To this day, no one knows Nakamoto's identity, although many people have tried to figure it out.
Unlike fiat currencies, such as the dollar, real, and euro, which are issued by a central bank, Bitcoin is decentralized — that is, it is not controlled by any government. It operates within a system called blockchain, a kind of virtual ledger that records users' crypto movements. In addition, it is protected by cryptography, a method of security and data encoding.
“The point of decentralization brings much more autonomy and control of the asset to people, making it possible, even, to do self-custody (store your own cryptocurrencies). The universality of BTC favors transactions anywhere in the world, without the need for conversion to dollars or euros. This is not only more efficient but also much faster and cheaper when comparing to more traditional payment methods,” explains João Canhada, founder of the exchange Foxbit.
How are bitcoins created?
Bitcoins are created within the blockchain and, in essence, are computer codes. This process, called mining, is governed by an algorithm known as Proof of Work. In practice, computers spread around the world, called miners, compete to solve complex mathematical problems.
The miner who succeeds verifies and records the transactions in the system. These transactions are organized into blocks, which connect to each other. It is from this structure that the name blockchain comes, which means “chain of blocks” in Portuguese.
What is bitcoin?
Bitcoin
Bitcoin is an electronic money that allows online payments directly between two people, without the intermediation of a financial institution, such as a bank. This was the definition given by Satoshi Nakamoto, the pseudonym of the person or group behind the cryptocurrency, in the whitepaper of the project, published at the end of 2008. To this day, no one knows Nakamoto's identity, although many people have tried to figure it out.
Unlike fiat currencies, such as the dollar, real, and euro, which are issued by a central bank, Bitcoin is decentralized — that is, it is not controlled by any government. It operates within a system called blockchain, a kind of virtual ledger that records users' crypto movements. In addition, it is protected by cryptography, a method of security and data encoding.
“The point of decentralization brings much more autonomy and control of the asset to people, making it possible, even, to do self-custody (store your own cryptocurrencies). The universality of BTC favors transactions anywhere in the world, without the need for conversion to dollars or euros. This is not only more efficient but also much faster and cheaper when comparing to more traditional payment methods,” explains João Canhada, founder of the exchange Foxbit.
How are bitcoins created?
Bitcoins are created within the blockchain and, in essence, are computer codes. This process, called mining, is governed by an algorithm known as Proof of Work. In practice, computers spread around the world, called miners, compete to solve complex mathematical problems.
The miner who succeeds verifies and records the transactions in the system. These transactions are organized into blocks, which connect to each other. It is from this structure that the name blockchain comes, which means “chain of blocks” in Portuguese.