What is Bitcoin?
Bitcoin is a decentralized digital currency, created in 2009 by an anonymous person or group known as Satoshi Nakamoto. Unlike traditional currencies issued by governments (fiat currency), Bitcoin operates on a peer-to-peer network, allowing users to send and receive payments without relying on intermediaries such as banks.
Key Features of Bitcoin
- Decentralization: Bitcoin is not controlled by any central authority, which mitigates the risks of government interference and manipulation.
- Limited Supply: There will only ever be 21 million Bitcoins, making it a deflationary asset. This scarcity can create a hedge against inflation.
- Security: Bitcoin transactions are secured by cryptography and recorded on a public ledger called the blockchain, making it nearly impossible to double-spend or counterfeit.
- Transparency: Every transaction is publicly verifiable, providing increased accountability within the network.
Bitcoin vs Altcoins
Bitcoin is the first and most well-known cryptocurrency, serving as a benchmark within the crypto space. While Bitcoin pioneered the concept of cryptocurrency, several alternative coins (altcoins) have emerged, each with unique features and purposes. Examples of popular altcoins include Ethereum, Ripple, and Litecoin. The primary differences often lie in transaction speed, governance, and technological innovations. Investors frequently regard Bitcoin as a store of value, while altcoins may offer different functionalities and use cases.