The first cryptocurrency: Bitcoin
Created in 2008 by Satoshi Nakamoto, who wrote a worldwide-known article called: “Bitcoin: A peer-to-peer Electronic Cash System“.
In this article, he described how he invented this bitcoin cryptocurrency based on blockchain.
The innovation was that it solved the Double Spending problem because it used a peer-to-peer network.
How does bitcoin work?
The network is pseudonymous because:
- As a person I can create and use an indefinite number of addresses through a software, and these addresses are anonymous because they are created without showing any document.
- The ledger is public, all the information written in the blockchain is public and everyone can read that address A transferred money to address B
- All the information is accessible to anyone but there is no connection to the individual in person. If someone finds that connection, s/he can investigate to see the whole data recording path that I did in the blockchain.
In Bitcoin it is possible to transfer bitcoin from an address to another and this operation is called transaction.
Miners help the system to work by sharing the computing power (their computers) needed to make the whole infrastructure operate.
Miners are rewarded with bitcoin.
21 million is the maximum amount of bitcoin that is meant to circulate. Now we have reached 19 million…what is going to happen when we reach the ceiling nobody knows.
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