What is Bitcoin?


What is Bitcoin?

Bitcoin was created in 2009 by Satoshi Nakamoto to be a “peer-to-peer electronic cash system.” (whitepaper) Today, many people use bitcoin as a store of value.

How does Bitcoin work?

Bitcoin uses blockchain and therefore is decentralized, immutable, and open. It’s also: 1. Hard capped: There will only ever be 21M bitcoin. 2. Single-purpose: Many holders just want it to be a token that stores value.

Bitcoin is arguably the most secure and decentralized of all cryptocurrencies. However, it can only support 3-7 transactions per second.

This is good enough for its primary use case of storing value, but projects like Stacks and Lightning are working to let Bitcoin do more things. A brief history of Bitcoin

•2008: A person or group using the name Satoshi Nakamoto published a whitepaper that outlined a plan for a "new electronic cash system that's fully peer-to-peer, with no trusted third party." •2009: The first Bitcoin is mined.

•2010: A programmer named Laszlo Hanyecz makes the first Bitcoin transaction, buying two Papa John pizzas for 10,000 Bitcoin (now worth $600M+, oops).

•2013: Bitcoin experiences several controversies including the collapse of Mt. Gox exchange and the seizure of 26,000 BTC from Silk Road (a black market). •2017: Bitcoin Cash is created as a fork of Bitcoin with larger block size to enable faster peer to peer transactions.

2021: El Salvador becomes the first country to adopt Bitcoin as legal tender. #Bitcoin

How to Explain Bitcoin to 4 Different Age Groups

There’s no doubt that you had to explain what is Bitcoin at least once. Curious friends, colleagues, and family members interested in its price want to know more, and we’re here to help you explain it to four different age groups.

When did you buy your first Bitcoin, register on Binance, or use the crypto wallet for the first time? It might feel like ages ago, but Bitcoin has been here for a mere ten years. Where will it be in the next decade? The public interest in Bitcoin and cryptocurrencies is growing every year. With mainstream media coverage, conferences, and even state-led implementation of crypto and blockchain, we truly are early.

The research from Glassnode reports only around 23 million bitcoin users in the world. Seems a lot? That's only a bit less than the population of Nigeria.
With this outlook of future growth, you and your close ones must understand how bitcoin works. And while it's usually the bitcoin price that starts the discussion, one first needs to understand its core principles and fundamentals. Otherwise, they might be for a bumpy ride.
We'll start with the most straightforward and understandable description of bitcoin for children, then continue with the teenagers and adult professionals, then end up with seniors.

Bitcoin for Children

A child's brain can absorb an increased volume of information if we accurately deliver it to them. Their vocabulary is limited, so you have to stay wary of technical jargon and unfamiliar terms. Simplified examples are a great way of getting your message through.
The best way to communicate an idea with a child is through active play. Kids love to play business, and explaining bitcoin in a transaction of assets is an excellent example of this method.
"Bitcoin is digital money. It is stored on a computer so you can't hold it like a normal coin. If you want a new toy, food, or clothes, you need to buy it with money. You can use banknotes or coins, but you can also use bitcoin. You pay with an app on your phone."

Bitcoin for Teenagers

Teenagers are a generation that is most accustomed to technologies. Many teenagers at least heard about bitcoin, and many of them even own some. But to buy a few satoshis, you don't need to read Satoshi's bitcoin white paper.
Teenagers understand the concept of storing value, so it's worth going beyond just the peer-to-peer transactions.
"Bitcoin is digital currency operating via the internet on a digital ledger called the blockchain. There's no business, government, or organization controlling or issuing bitcoin, and it runs on millions of specialized computers called miners. Miners verify and record all bitcoin transactions, process algorithms, and add new blocks to the blockchain for which they receive a fee. Anyone with an internet connection and required hardware can be a miner and contribute their computing power towards mining new bitcoins."
"Bitcoin allows you to buy goods, transact money, or use it as a store of value or investment—all of this through your phone or a computer, no banks or offices. Bitcoin has a limited supply, which means that there'll never be more than 21 million bitcoins. You can divide bitcoin into smaller units, called a satoshi, so you don't need to buy one whole bitcoin. You can also work to earn bitcoin."

Bitcoin for Adult Professionals

With adults, we can assume that they have their fair share of experience with the limitations and flaws of the existing financial and monetary system. They're tech-savvy and understand and use digital money.
"Bitcoin is a decentralized peer-to-peer network running on a distributed global ledger called the blockchain. The blockchain is operated and maintained by miners – individuals and businesses contributing their computing power to transaction and algorithm processing and blockchain maintenance. Every bitcoin transaction ever made is recorded by miners to the blockchain and can never be changed. Bitcoin has no regulatory or issuing authority, and it's censorship-resistant.
The limited supply of 21 million adds bitcoin scarcity, and its issuing protocol makes it the least inflationary asset. Bitcoin is great for asset transactions, e-commerce, store of value, or investment. Bitcoin is stored in a bitcoin wallet – an app, software, or a hardware device that allows you to protect and manage your funds."

Bitcoin for seniors

We tend to underestimate the knowledge of older generations. While they might not be actively using the latest tech gadgets, they usually have a basic understanding of the new world.
You should aim to pass your message by using examples they understand and experience in their everyday lives.
"Bitcoin is digital cash, stored as records in electronic form, just like the money on debit or credit cards. You can't physically hold them, but you can use them to pay for goods and services, transfer money globally, or invest in them. This all happens on a virtual network called the blockchain, operated by individuals and businesses called miners.
Miners have multiple functions. Their main service is to permanently record every bitcoin transaction into a digital book of records, like bookkeepers. They're rewarded for this activity by other bitcoin users in the form of a transaction fee. They're replacing the banks who issue and manage our existing currency with a faster, cheaper, and more efficient solution."
You don't need to write these down and follow them word-to-word when discussing Bitcoin with your friends and family. Use your own words or find inspiration in some of the great bitcoin books and resources out there.

To completely understand Bitcoin and how it could benefit the future world, you'll need a background in a few more things. Mainly the principles of economy, fiat currencies, central banking, and centralization. If you're hungry for knowledge or need some great resources to share with your friends, the Binance Academy is the place to go. #bitcoin