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Bitcoin (BTC)

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What is Bitcoin (BTC)?

Bitcoin (BTC).png

  1. Native Blockchain:
    • Bitcoin operates on its own native blockchain, which is a decentralized, distributed ledger. This ledger is maintained by a global network of nodes (computers) that validate and record transactions.
  2. Consensus Protocol:
    • Bitcoin uses a consensus protocol called Proof-of-Work (PoW). This requires miners to solve complex mathematical puzzles, and in return, they're rewarded with Bitcoin. This process ensures the network's security and integrity.
  3. Trilemma (Security, Speed, Scalability):
    • Security: Bitcoin is known for its strong security, ensured by its PoW mechanism and decentralized nature.
    • Speed: A new block is added to the Bitcoin blockchain approximately every 10 minutes. This means a transaction may take around 10 minutes to be confirmed, but it can vary based on network congestion.
    • Scalability: One of Bitcoin's known challenges is scalability. The network can handle a limited number of transactions per second, which has led to debates and the emergence of solutions like the Lightning Network.
  4. Founder / Date Founded:
    • Bitcoin was introduced by an anonymous person or group of people under the pseudonym Satoshi Nakamoto.
    • Bitcoin's whitepaper was released in 2008, and the network officially started with the mining of the genesis block in January 2009.
  5. Objective / Use Case:
    • Bitcoin was created to serve as a peer-to-peer version of electronic cash, allowing online payments to be sent directly from one party to another without going through a financial institution.
  6. Total supply / Limit or Unlimited:
    • Bitcoin has a fixed supply cap of 21 million coins. This means that only 21 million Bitcoins will ever exist.
  7. Supply Deflation:
    • To control the issuance of Bitcoin, a process called "halving" occurs approximately every four years, where the reward for mining new blocks is cut in half. This ensures that Bitcoin's supply will never exceed 21 million and contributes to its deflationary nature.

          This overview provides beginners with a foundational understanding of Bitcoin based on key criteria. It's worth noting that the cryptocurrency space evolves rapidly, and those interested should regularly review updates and advancements in the technology.

References:

  • Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf
  • Antonopoulos, A. M. (2014). Mastering Bitcoin: Unlocking digital cryptocurrencies. O'Reilly Media.
  • Poon, J., & Dryja, T. (2016). The Bitcoin Lightning Network: Scalable off-chain instant payments. https://lightning.network/lightning-network-paper.pdf
  • Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf
  • Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf
  • Antonopoulos, A. M. (2014). Mastering Bitcoin: Unlocking digital cryptocurrencies. O'Reilly Media.
  • Antonopoulos, A. M. (2014). Mastering Bitcoin: Unlocking digital cryptocurrencies. O'Reilly Media.

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