Bitcoin, also written as BTC, is the largest and the first cryptocurrency in the world. A cryptocurrency is a digital form of money that exists purely in electronic form; bitcoin is a set of protocols and processes backed by encrypted code. Bitcoin was first invented by a pseudonymous person or group of people going by the name Satoshi Nakamoto. The identity or whereabouts of Satoshi Nakamoto remains a mystery to everyone except for a few speculations that are not reliable. Bitcoin was invented in the year 2008 and was launched in 2009. Bitcoin has inspired the creation of more than 5000 cryptocurrencies known as alt coins. At the time of posting this, 1 Bitcoin in Kenya shillings was Ksh6,247,580.25.
How Bitcoin Works
Bitcoin is a decentralised form of currency; transactions are not controlled by a central authority such as a central bank, a single administrator, or even the government, unlike traditional fiat currencies. Bitcoin allows anyone to make transactions regardless of race, gender, and other differences. Transactions are made possible for user-to-user by the bitcoin peer-to-peer technology. The bitcoins are verified through cryptography, created, distributed, traded, and recorded in public distributed ledger known as a blockchain. A blockchain is made up of many blocks that contain information on every transaction made, including date, amount of bitcoins, transaction codes, time, buyer, and seller.
Pros and Cons of Bitcoin
Bitcoin is a digital currency; counterfeit tokens can therefore not be made. Bitcoin enables a free market between two transactors eliminating taxation, high transaction fees, and government interference. Bitcoin is also very safe since the transaction codes are unique, long, and random, reducing the probability of fraudulent activities. Using bitcoin provides anonymity since the transactors use transaction IDs that cannot be traced to a specific person; this promotes buying illegal substances through the dark web. A good example is the silk road company that accumulated bitcoins worth 9 million USD after selling hard drugs on the dark web.