What is bitcoin?

If you’ve been reading the news recently, you’ll have probably heard about Bitcoin’s mysterious founder, Satoshi Nakamoto. Nakamoto is widely regarded as a pseudonym. Recently, an Australian entrepreneur put himself forward as the real Nakamoto, making headlines across the world, but this claim was later retracted. So what exactly is bitcoin, and why is there so much interest in it?

Bitcoin is a digital currency – the virtual equivalent of dollars, euros or pound sterling. It’s identified by the letters BTC, and was invented in 2008 by the enigmatic Nakamoto. Since then, it’s made a big impact.

In 2015, the number of merchants accepting bitcoin payments rose over 100,000, including huge companies like PayPal, Microsoft, Dell and Time Inc.

There aren’t any intermediaries in bitcoin transactions; it works through peer-to-peer deals, backed up by network nodes, recorded in a public register known as the ‘blockchain’. There are various subunits – millibitcoin, microbitcoin and satoshi. Bitcoin’s value is highly volatile, but in 2016 one unit was worth about $445.

The other point about bitcoin is that it is a decentralized system; there are no central banks controlling the supply of money. In addition, it’s a pseudonymous currency; in other words, funds are not linked with named individuals or entities, but rather bitcoin addresses.

Bitcoin has attracted some controversy due to its existence outside the institutional banking and governmental framework. However, big merchants now accept it as a valid payment method, and some economists have praised it as an exciting innovation.

If you want to start using bitcoins, you can begin by clicking here. Alternatively, if you have a question about bitcoin, let us know by commenting below.