To put it simply, bitcoin is electronic money or rather cryptocurrency. It’s a form of digital currency where no one controls it; and it’s not printed like ordinary Rands, US dollars or Euros. It is produced by people who run computers using software that solves mathematical problems. These people are known as ‘bitcoin miners’.
Bitcoin allows any person based anywhere in the world to send and receive money without permission from a bank, corporation or government entity. The transaction is instantaneous and the cost is negligible regardless of the amount of money being sent or received. This takes intermediary banking services out of the equation, such as PayPal, MoneyGram, Western Union and Payfast.
It’s a decentralised digital currency and the largest of its kind in terms of total market value. Bitcoin is decentralised because it is not controlled by any centralised banking merchant. It is created and managed through advanced encryption technology known as cryptography.
Today, Bitcoin can be used as a legal form of payment for products and services and because the transaction fees are substantially lower than typical credit card payment processes, merchants are more than happy to accept bitcoin. The big difference between bitcoin and credit cards is any fees charged are paid by the purchaser and not the vendor.
Who invented bitcoin?
Bitcoin was invented per se by a pseudonymous person known as Satoshi Nakamoto, who for various reasons has chosen not to disclose his or her real identity (it may even be a group of software inventors). Nakamoto first published the invention of bitcoin in a white paper in 2008 and released it as open-source software in 2009.
? Nakamoto was active in the development of bitcoin up until 2010 but has since disappeared off the radar. Many people have claimed to be Satoshi Nakamoto but no one knows for sure who the person is and where he or she is now.
? Nakamoto devised the first blockchain database. Through this process, Nakamoto solved the double-spending problem inherent to digital currency using a peer-to-peer network. In essence, Nakamoto produced a virtual currency that was independent of any central authority, which could be transferred electronically more or less instantly and with very low transaction fees.