Bitcoin is a next-generation digital currency released in 2008 and is known as a cryptocurrency since its units and its network are cryptographically protected.
Bitcoin was released in 2008 by an individual or group of people under the pseudonym Satoshi Nakamoto. The reasons behind Bitcoin’s introduction and its usability in the real-world were listed in the White Paper released.
The currency was released immediately after the burst of the housing bubble in 2007-08. Since the housing bubble crisis was majorly attributed to unlawful use of power by big banks and financial entities, Bitcoin sought to eliminate this concentration of power and make everything transparent.
Owing to this, Bitcoin is a decentralized currency system. This means that a single entity does not govern it and instead works as a peer-to-peer network. Here each network partner is recognized by their device and is referred to as a ‘node’ and exerts equal power in the decision making.
Bitcoin is based on blockchain technology. It is the blockchain that makes Bitcoin a decentralized, distributed, transparent, and immutable currency. Each transaction on the Bitcoin network is transparent and available in the public domain. Every node in the Bitcoin network has its copy of the blockchain.
There are a few mandatory protocols listed in the Bitcoin network that govern every activity in it. These protocols specify activities like introducing new coins in circulation, validation of a transaction, change in coin ownership, modification of the Bitcoin network, and likewise activities. Bitcoin mining is the process by which new coins are introduced in circulation, as well as the transactions occurring on the network are validated.
An important aspect of the terminology is that whenever ‘Bitcoin’ is used, it specifies the network or the system. When ‘bitcoin’ is used, it specifies the unit of the currency.