Bitcoin As A Major Cryptocurrency: Basic Principles Explained In Layman Terms
Bitcoin is a new-generation decentralized digital currency created on the Internet. No one controls it; the issuance takes place as the result of operation of millions of computers across the world, with the use of a program for calculation of mathematical algorithms.
Virtually anything available online can be purchased with Bitcoins, the same way you buy with dollars or euros. Just like real currencies, the digital coin is tradeable on exchanges, where you can also buy Bitcoin with credit card online or withdraw your digital funds into a “real” account. However, there’s a major distinction between Bitcoin and any other form of money: decentralization. No financial or other institution in the world exercises control over BTC.
The digital coin’s developer adopted the pseudonym Nakamoto Satoshi. Back in the day, this person (or group of persons) proposed the concept of an electronic payment system based on mathematical calculations. The idea lied in exchanging and transferring electronic coins without any centralized control, more or less instantly, with the lowest possible transaction charges.
The issuance of BTC is possible only in the digital form; anyone wishing can start mining Bitcoins. It’s done with the use of the computing capacities of your PC in a distributed network. When Bitcoins are sent from one wallet to another, the very same network processes the transaction, which transforms Bitcoin into an independent digital payment system.
National currencies used to be secured by gold or other precious metals; now this role is performed by the country’s GDP. Hypothetically, you can go to any bank of your country and exchange your paper bank notes for their gold equivalent, and vice versa. Bitcoin, on the other hand, isn’t secured with anything; it’s pure math. Any person in any corner of the world can run a BTC mining script on their PC and become a miniature central bank. The script’s source code is open, so anyone can also check how it works.
Among the main distinctions of BTC, particularly noteworthy are: non-centralized architecture; uncomplicated principles of use; anonymity; transparency; zero or near-zero transaction charges; incredibly quick transfers; irrevocable transactions.