What is Bitcoin?

Bitcoin is the original, world-first decentralized peer-to-peer global payment network. Created in 2008 as a reaction to the economic collapse caused by widespread corruption in the banking and broader financial system, the mysterious and as yet-unknown Satoshi Nakamoto envisioned a currency that would enable the transfer of value with no intermediary. This new form of currency would act as an inherently scarce asset, with a limit of no more than 21 million coins to ever be mined.

Bitcoin was, therefore, carefully and cleverly designed to act as a sort of digital gold that could store and transact value without sacrificing scarcity, unlike fiat currency which could be devalued and manipulated by actions such as quantitative easing and fractional reserve banking.

The Original

As the original and longest-living decentralized payment network, Bitcoin enjoys, by far, the greatest security and integrity of all blockchains via the enormous hashing power of its global network, preventing the possibility of 51% attacks and double-spending. Whilst hundreds of competing altcoins and forks have attempted to usurp the crypto crown with differing approaches and solutions, Bitcoin remains the industry standard with a huge number of developers and the broadest market acceptance of any cryptocurrency.

Bitcoin is a UTXO blockchain network that uses cryptographic proof-of-work consensus to confirm transactions and to generate new blocks. Much of the network is maintained by highly powerful ASIC miners, generating an enormous quantity of hashing power, thus preventing any single entity from being capable of attacking the blockchain’s integrity.

Over time, the Bitcoin protocol has added features such as SegWit, or Segregated Witness, to enable an increase in scalability of the network by reducing the demands of transactions. The Bitcoin protocol has retained a relatively small block size, alleviated to some extent with SegWit, to ensure that the blockchain does not become so large as to be excessively centralized due to memory demands of storing the enormous amount of the massive blockchain’s data. Current scaling innovations favor off-chain solutions, most prominently the rapidly growing lightning network, which is designed to enable virtually instantaneous transactions, even of tiny amounts of value, at little to no cost.

The Gold Standard

Bitcoin remains the entry-point for most altcoin trading, thereby acting as the reference point for all other cryptocurrencies. The market valuation and general sentiment of the entire cryptocurrency market is highly correlated with Bitcoin for this reason.

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