The first cryptocurrency to be traded was Bitcoin in 2009. The author is considered to be Satoshi Nakamoto, although it is still not completely known whether it is one person or a group of people who worked under that nickname.
Like regular currencies, Bitcoin can be used for electronic purchases. The biggest difference from conventional money is the fact that it is decentralized. This means that no institution, such as a bank, controls this money. Bitcoin was created and first used by the public in 2009. The goal of the developer (or developers) was to create an electronic payment system through which payments are made more or less instantly, with very low transaction fees. However, the main goal was to create a currency independent of any central authority.
What Is Bitcoin Based On?
Conventional currencies are typically based on gold or silver. In theory, you could get these metals behind your money deposited in the bank, although it doesn’t work that way in practice. Bitcoin is not backed by any other asset, but only by the computing power provided by the users of the network. All transactions are carried out on the basis of peer-to-peer (P2P) communication, which means directly between two users, without an intermediary.
The principle of P2P communication is the equality of both sides of the communication channel. People all over the world use software programs that follow a mathematical formula to create Bitcoins. The math formula and software is open source, so anyone can look at it and make sure it does what it’s supposed to.