What is Bitcoin?

For those who do not know (really?—it’s 2017), Bitcoin is a digital currency based on a public ledger known as the “blockchain”. It was created back in 2009 by a person or group known as Satoshi Nakamoto, whose identity remains a well-guarded secret.

Bitcoin was created with the purpose of revolutionizing the traditional financial system, by leveraging peer-to-peer technology and hardcore mathematics. The currency is, strangely, backed by processing power instead of politics and greed—and it’s completely unstoppable by banks or governments.

In addition to the freedom that Bitcoin provides over traditional currency, the cryptocurrency was created with speed in mind. Bitcoin transactions are processed instantly and quickly verified by a network of “miners” operating on the extremely-powerful blockchain network.

These Bitcoin transactions are much more cost effective than traditional bank transfers, considering the fact that most transactions only cost a few cents (yes, cents). If you’ve ever made a bank transfer across a border, you’ll know how amazing that is (my bank charged me $50 USD on a $150 USD wire three days ago).

Bitcoin also has a fairly strong privacy element to it, as Bitcoin “addresses” (basically the Bitcoin version of bank account numbers) are not connected to the names of the beneficiaries. Transactions are pseudonymous by default, and there are even controversial ways to acquire complete financial anonymity with the cryptocurrency.

Apart from what has already been outlined, it’s worth mentioning some of the pitfalls of Bitcoin. Firstly, transactions are by-default completely public due to the fact that the details for every transaction is stored within the blockchain ledger that I mentioned earlier. Also, Bitcoin is non-repudiable, which means that once a payment is sent to the network there’s no way of getting a refund (besides asking nicely).