Bitcoin is a currency born into the digital age. When using Bitcoin for the first time people should get an idea of how it works. Digital money is different than the traditional finance world is used to. It offers three core values in which many currencies cannot attain: Decentralization, Open Source, and Peer-to-Peer networking. It is important to get an idea of how to use Bitcoin before investing in it or starting wallet. At Bitcoin.com we are very passionate about the protocol and want to help you learn along the way. There is a lot to learn, but it is not beyond your grasp. Bitcoin is a truly beautiful innovation, and it has the capacity to change the world. .Bitcoin is a network that allows a new form of monetary payment and medium of exchange. The currency is the first of its class as a decentralized peer-to-peer technology with no central point of issuance. Bitcoin's network uses Proof-of-Work as an economic deterrence against points of failure. Users and miners make up this vast network. They secure and update its blockchain ledger collectively. The Bitcoin protocol contains the longest digital distributed ledger in existence. The importance of Bitcoin is incredible as it brings financial inclusion and a new economy to every region in this world. It also prevents money from being centralized into the hands of an elite few at the expense of the many. Bitcoin eliminates the need for trust in large organizations and governments.
The original Bitcoin code was designed by Satoshi Nakamoto under MIT open source credentials. In 2008 Nakamoto outlined the idea behind Bitcoin in his White Paper, which scientifically described how the cryptocurrency would function. Bitcoin is the first successful digital currency designed with trust in cryptography over central authorities. Satoshi left the Bitcoin code in the hands of developers and the community in 2010. Thus far hundreds of developers have added to the core code throughout the years.
Bitcoin is dependent on the blockchain that underlies and structures the system. The blockchain is the vertebrae of the protocol and the glue that holds the network together. It is simply a vast, distributed public ledger of account. It keeps track of every transaction ever made in the network, and all transactions are timestamped and verified by network miners. This is how it works: miners with specialized computers compete to solve mathematical puzzles with other computers, and once they solve a puzzle they are awarded with some Bitcoin, but they also add a “block” of completed transactions to the blockchain for future viewing and verifiability. Once a block is added to the chain the cycle repeats itself, and the computers continue to compete to solve these difficult problems. Every transaction on the blockchain is completely transparent and accounted for in its log. Anyone can see the public keys of any transaction they want (although there are no names associated with transactions). One could go all the way back and view the very first transactions ever made on the first block ever created. This block was unironically called the Genesis Block.
