Bitcoin is an invention that, for the first time in history, allowed a group of software users to create and manage a digital money supply outside of the control of any government or bank.
It’s helpful to think of Bitcoin as a software protocol like those you interact with every day: think of SMTP (which helps route your emails) and HTTP (which ensures that servers deliver the web content you request from your browser). ). These technologies are protocols: sets of rules that dictate how computers transfer data.
Without protocols, the network we call the Web would be in chaos.
The Bitcoin protocol allows the computers running its software to manage a set of data (the block chain) and enforce a set of rules that make this data (bitcoins) scarce and potentially valuable.
As its essential building blocks, the Bitcoin protocol uses:
The Bitcoin blockchain is a complete record of network history validated by people running the Bitcoin software (nodes). This ensures that unlike most digital data, which can be freely copied and changed, bitcoins cannot.
Who created Bitcoin?
While Bitcoin can safely claim to have created the world’s first successful cryptocurrency, its technology is based on decades of ideas about how cryptography could help create digital money.
In 2006, “Satoshi Nakamoto”, a person or group still using the pseudonym, began writing the code for a new digital cash system called “Bitcoin”.
Want to learn even more about the origin and early days of bitcoin? You can consult our article What is the Bitcoin white paper?
How does bitcoin work?
There are two main concepts to understand if you are interested in really understanding how the Bitcoin protocol works.
Fortunately, we have in-depth articles that look at both of these topics!
Use of cryptocurrencies cryptography to help the network to track the information in a less intensive but extremely secure way. You can learn all about this in our article. How do cryptocurrencies use cryptography?
Then a process known as mining it helps ensure that the information is actually recorded on the blockchain. Once again, you can learn all about the mining process as well as the role cryptography plays in the process with our article. What is Bitcoin mining?
What gives BTC value?
Bitcoin shares many of the characteristics that give value to traditional commodities and government money. Some of these factors include:
Want to learn more about each of these? Still have more questions about the world’s first cryptocurrency?
go to the Kraken Learning Center and take a look at our article What is Bitcoin? to learn even more about the Bitcoin protocol.
Remember that you can also to buy Y sell BTC for other cryptocurrencies on exchanges like Kraken, which are online 24/7/365.
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell or hold any digital asset or to engage in any specific trading strategy. Some cryptographic markets and products are not regulated and you may not be protected by government compensation schemes and/or regulatory protection. The unpredictable nature of crypto asset markets can lead to loss of funds. Taxes may be payable on any returns and/or on any increase in the value of your crypto assets and you should seek independent advice on your tax position.
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This post Kraken 101: The Beginner’s Guide to Bitcoin (BTC)
was published first on https://blog.kraken.com/post/17141/kraken-101-the-beginners-guide-to-bitcoin-btc/