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Bitcoin is the world’s first mainstream cryptocurrency, described in 2008 by an unknown person or a group called Satoshi Nakamoto.
The purpose of Bitcoin is to become an alternative to traditional payment solutions, offering world-wide payments incredibly fast and cheap, without having a central authority, like the bank, controlling the transactions. Instead it is controlled by computers around the world who validate all of the transactions in a P2P (Peer to Peer) fashion.
Bitcoins are created in the process of “mining”, which means that the computers in the network solve complex mathematical puzzles to validate transactions and whoever solves the puzzle the fastest gets a certain amount of Bitcoin as well as transaction fees as a reward. This is also called the Proof-of-Work consensus algorithm, which is the most popular algorithm in the cryptocurrency world.
Interesting facts:
· A lot of people have heard about Bitcoin, but do not realize it is a cryptocurrency. Other people use Bitcoin and cryptocurrency as synonyms;
· While the information about users is kept secret, the ledger of Bitcoin transactions are completely transparent, and everyone can see the amounts sent;
·There is a finite number of Bitcoins — 21,000,000BTC (they are being mined and it’s calculated that the last Bitcoin will be mined on 2040.);
· Bitcoin mining uses enough energy annually to power almost 4,000,000 average US households;
· The first real world Bitcoin transaction happened on May 2010, when Laszlo Hanyecz bought 2 pizzas for 10,000 BTC;
· Bitcoin can be used to buy products and services in some places, but it is far from its initial goal of being a fast and cheap payment method. As the time moved on, Bitcoin became more of a store of value rather than a payment system.
· The current fee for a transaction that gets confirmed in about 1 hour is around $10 USD (at the time of writing, 17/JAN/2018).
· Bitcoin’s team is developing a concept called Lightning network that will solve the scalability problems as well as high fees and slow speeds;