*Additional information will be added to this post.
Bitcoin is a digital currency created by an alias named Satoshi Nakamoto in January of 2009. Satoshi supplemented his bitcoin creation with what is called a White Paper. A white paper explains the technology behind bitcoin and how the system works. I suggest reading the linked White Paper, which is a little heavy on the technology side, but it's the best way to begin to understand the nuts and bolts of the currency.
Bitcoin can be transferred from peer to peer over the internet without intermediaries such as banks or governments. This is called a decentralized asset in the space, meaning no one individual has control over this currency. Because bitcoin can be sent over the internet without the involvement of banks, we don't have to pay fees to these institutions, anyone with internet access can use the network, even in rural areas, and lastly, there are no prerequisites to join or use the asset.
Satoshi decided to create only a certain amount of bitcoin and have the coins mined at a certain rate over time. I mentioned a few new terms here, so let me explain. To combat inflation, bitcoin will only ever mint 21 million coins. Once the 21 million coins are mined, no further coins will be 'printed.' Unlike the current monetary system, where the government can print money when it decides to, thus creating inflation, meaning our dollar loses value. Bitcoin safeguards around this by only creating the 21 million mentioned.
What is mining?
To mine bitcoin and release it to the market, they need to be mined by computers. Mining is a technological process in which computers solve unique codes, cryptology, and once they figure out the solution, they are awarded bitcoin.
- Accessible with an internet connection
- No prerequisites needed
A key component to bitcoin is its code (the way it works) is open-sourced, meaning anyone can look at it and even use some of its code to create on top of bitcoin if they choose to.
See the below table, which indicates past and future Bitcoin halving dates.
To be continued...