Emerging Technologies
Bitcoin
Definition
Bitcoin (BTC) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Why It Matters
Bitcoin was the first cryptocurrency, and it introduced the world to blockchain technology. It proved that a decentralized, digital form of money could exist and operate without a central authority.
Contextual Example
A user can send Bitcoin to another user anywhere in the world by signing a transaction with their private key. The transaction is then broadcast to the network, verified by miners, and added to the blockchain.
Common Misunderstandings
- Bitcoin is often referred to as "digital gold" because of its fixed supply (only 21 million will ever be created) and its use as a store of value.
- The process of verifying transactions and creating new bitcoins is called "mining".