Bitcoin 101: Introduction to Bitcoin
Have you heard of Bitcoin? If not, now is the time to learn about one of the greatest inventions in human history. If yes, you get another chance to get a closer look at Bitcoin. Despite what mainstream media says about Bitcoin, I can assure you it’s not a scam, it’s not a Ponzi scheme, it’s not whatever it is you should be afraid of. Let’s begin our journey to Bitcoin.
First, some background about Bitcoin. Bitcoin was created by a pseudonymous person or a group of people who go by the name Satoshi Nakamoto. In 2008, Satoshi Nakamoto published the Bitcoin white paper through the Cryptography Mailing List. On January 3rd, 2009, Bitcoin was born, and Nakamoto mined the first block of Bitcoin, also known as the genesis block. Satoshi then wrote a line in the coinbase of the genesis block, “The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks.” Which is the headline of The Times. Satoshi Nakamoto’s involvement with Bitcoin lessened, eventually vanishing and leaving the Bitcoin project to the community. Since then, the real identity of Satoshi remains unsolved.
What is Bitcoin? According to Bitcoin’s white paper, Bitcoin is a peer-to-peer electronic cash system. Look at the Bitcoin network as an open distributed ledger that keeps every transaction from the past, present, and the future in one giant decentralize database. However, Bitcoin is not only a currency, it’s a protocol: currency is just one of the applications it displays. It can be applied to many different fields as technology grows.
The Characteristics of Bitcoin
Open and Decentralized: The Bitcoin network functions independently: it’s not controlled by any countries, governments, organizations, or a single person. It is an open source network; everyone can examine the source code of Bitcoin. The protocol itself can be modified or updated only if over half of the community agrees.
Scarcity: Bitcoin has a total supply of 21 million. When it reaches its maximum, the underlying algorithm will not issue more.
Divisibility: The smallest unit of Bitcoin is 0.00000001 satoshi. Ideally, it can support the needs of many if Bitcoin is adopted globally.
Immutability: One of the unique features of Bitcoin is no transaction can be reversed. A decentralized system means no central authorities can make an adjustment on their personal will, what’s done is done.
Anonymity: Owning a bitcoin does not require identity verification. One can create a wallet and enjoy Bitcoin within 10 minutes: no ID, no passport, no billing address, etc.
Transparency: In the Bitcoin network, every single transaction is traceable. There is no way to fake it or hide it in the Bitcoin network, but the identity of the Bitcoin owner remains safe and secure.
Lastly, remember this: If someone claims to you that he or she is Satoshi Nakamoto and wants to offer you something, whatever it is, the person is a scammer and for your own sake, stay as far as possible away from a scammer.
