What is Bitcoin?
Posted: Wed May 21, 2025 5:32 am
Digital Currency: Bitcoin is a purely digital form of money. Unlike traditional currencies (like USD or GBP) which exist as physical cash and digital bank balances, Bitcoin only exists digitally as entries on a public ledger.
Decentralized: This is its most defining characteristic. Bitcoin operates without any central authority, such as a bank, government, or financial institution. Instead, it relies on a global network of computers (nodes) that collectively maintain and verify the system.
Cryptocurrency: It uses strong cryptography to nursing homes email list secure transactions, control the creation of new units, and verify the transfer of ownership. This encryption ensures security and prevents fraud.
Peer-to-Peer: Transactions occur directly between users without the need for an intermediary. You send Bitcoin directly to another person's Bitcoin address.
Limited Supply: A core tenet of Bitcoin is its finite supply. There will only ever be 21 million Bitcoins created. This scarcity is designed to make it a deflationary asset, similar to how gold is considered a scarce resource.
Divisible: While "a Bitcoin" is the full unit, it's highly divisible. The smallest unit of Bitcoin is called a satoshi, which is one hundred millionth of a Bitcoin (0.00000001 BTC). This means you can buy or send tiny fractions of a Bitcoin.
How Does it Work (Simplified)?
Blockchain: Bitcoin transactions are recorded on a public, distributed ledger called the blockchain. This blockchain is a continuously growing list of "blocks" (bundles of transactions) that are cryptographically linked together in chronological order.
Decentralized: This is its most defining characteristic. Bitcoin operates without any central authority, such as a bank, government, or financial institution. Instead, it relies on a global network of computers (nodes) that collectively maintain and verify the system.
Cryptocurrency: It uses strong cryptography to nursing homes email list secure transactions, control the creation of new units, and verify the transfer of ownership. This encryption ensures security and prevents fraud.
Peer-to-Peer: Transactions occur directly between users without the need for an intermediary. You send Bitcoin directly to another person's Bitcoin address.
Limited Supply: A core tenet of Bitcoin is its finite supply. There will only ever be 21 million Bitcoins created. This scarcity is designed to make it a deflationary asset, similar to how gold is considered a scarce resource.
Divisible: While "a Bitcoin" is the full unit, it's highly divisible. The smallest unit of Bitcoin is called a satoshi, which is one hundred millionth of a Bitcoin (0.00000001 BTC). This means you can buy or send tiny fractions of a Bitcoin.
How Does it Work (Simplified)?
Blockchain: Bitcoin transactions are recorded on a public, distributed ledger called the blockchain. This blockchain is a continuously growing list of "blocks" (bundles of transactions) that are cryptographically linked together in chronological order.