Bitcoin is a digital or virtual currency, also known as a cryptocurrency, which allows you to send and receive money online without using traditional banks or payment systems. It was created in 2009 by an unknown person or group using the pseudonym “Satoshi Nakamoto” to be a “peer-to-peer electronic cash system.” (Bitcoin Whitepaper)
Before we cover what Bitcoin is, let’s talk about what money is overall.
Most people think of money as the bill you hand in at the local store. However, that’s far from the whole picture. Money has developed four main uses:
Although Bitcoin is primarily used as a store of value like digital gold, it has many other benefits and opportunities because it is an accessible and versatile currency. It only takes a few minutes to transfer bitcoin to another user and it can be used to purchase goods and services where accepted.
You can think of Bitcoin as a digital public infrastructure for money; similar to how the internet is digital public infrastructure for information.
Satoshi published the Bitcoin Whitepaper in 2008. The whitepaper highlighted how Bitcoin is unique. You’ll remember these terms from Day 2 (what is a blockchain). Bitcoin is:
You can buy Bitcoin in fractions (e.g., 0.0000001 bitcoin), which are known as satoshis.
Bitcoin is the first cryptocurrency and is considered by most to be the most secure (as it is the longest running blockchain without any security issues), the most decentralized, and the best “store of value” of any of the cryptocurrencies (again due to being the oldest, with a capped supply – it is often referred to as “digital gold” and can be considered as such).
In our next section, we’ll cover: “What is Ethereum?”