Bitcoin: A Brief Introduction to the Original Cryptocurrency

​Bitcoin is a decentralized digital currency which is built on the revolutionary blockchain technology, the purpose of which is to provide people and organizations all over the world with an alternative peer-to-peer means of making payments that is fast, private, and doesn't require the modern financial system/infrastructure. Bitcoin allows for the potential eschewing of fiat money to perform financial transactions in favor of an immutable record (eg. blockchain) that is deeply decentralized and highly secure. 

Bitcoin (BTC) came on the scene in January of 2009 - during the heart of the global financial crisis of the time. In a white paper published by Satoshi Nakamoto, Bitcoin's purpose and technical framework were articulated - although the purpose has evolved and continues to do so, Bitcoin has remained the most trusted and most popular digital currency to date. 

General Characteristics of Bitcoin

Bitcoin when it first came online was an innovation the like of which has never been seen. Bitcoin has many distinct characteristics and features some of which include:

• Decentralization: Bitcoin is a completely decentralized digital currency that is not issued by a government or a central bank anywhere in the world. It is completely made (mined), stored, sent, and received on an independent network known as the blockchain which relies on a network of decentralized computers around the world to assist with validating transactions. This decentralization prevents state censorship and goes a long way to making Bitcoin a truly global means of exchange. As a digital currency without a single point of failure (eg. an individual computing system on the network can fail with the overall system still intact), it is difficult for malicious organizations and governments to censor or cripple Bitcoin. 
• Counterfeit Resistant: Bitcoin is the first man-made product that seems to almost 100% resistant to being compromised or tampered with by other humans. The blockchain, on which the Bitcoin transactions are created, verified, and recorded, is a network of computers spread all over the world.  Each new transaction has to be verified as being genuine by a complete consensus of the participating computers. This prevents what is called the "double spending problem" where someone uses the same Bitcoin twice. 
• Fast Transactions: Although there are newer cryptocurrencies and cryptoassets that are faster than Bitcoin, it still remains one of the fastest means of transacting when compared to any traditional financial banking services (eg. wire transfers, sending a check, ACH transfers, etc.). This transaction speed is one of the key features that make Bitcoin attractive to users all over the world - many people are surprised that the financial system has not kept pace with all of the other technological advances over the last few decades. 

How are Bitcoin acquired?

Bitcoin can be created through a complicated and capital-intensive (the capital being computing power) process known as mining - miners receive a reward (akin to a fee) for providing the computer power needed to validate Bitcoin transactions. Alternatively, an individual can simply buy Bitcoin from a cryptocurrency exchange that is reputable using their fiat currency.

Bitcoin and Banking

​Bitcoin can be created through a complicated and capital-intensive (the capital being computing power) process known as mining. Alternatively, an individual can simply buy Bitcoin from a cryptocurrency exchange that is reputable using their fiat currency.

Bitcoin is not accepted by any commercial bank for safekeeping as of this writing - banks traditionally only deal in the fiat currency realm with banks in each country primarily transaction and storing the fiat currency of that particular country under regulation from central banks and other governmental regulatory bodies. However storing Bitcoin is easy and convenient without a banking system because they can either be stored on exchanges (eg. Coinbase, Kraken, Poloniex, Xapo, etc.) or on a private Bitcoin wallet - each method has its own advantage and disadvantages, but both are generally convenient and reliable if done properly. 

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