Bitcoin is a type of digital money that you can use to buy things on the internet, just like regular cash. It was created by a person or group of people in 2009 who didn’t trust governments or banks to handle our money. The true identity of the person or group of people who created Bitcoin is still a mystery. The name used by the creator(s) of Bitcoin is Satoshi Nakamoto, but it is believed to be a pseudonym or a group of individuals working under that name. Despite several attempts to uncover the true identity of Satoshi Nakamoto, their identity remains unknown.
Now, this mysterious group of people came up with a new way of keeping track of transactions using a fancy technology called “blockchain”. This is what enabled Bitcoin to exist.
Each transaction gets recorded to a digital ledger that is transparent and secure. Every time someone buys something with Bitcoin, it gets written down in a “block”. Then, that block gets added to a chain of other blocks, forming a “blockchain”. This way, everyone can see all the transactions that have ever been made with bitcoin, and nobody can cheat the system by changing any of the blocks.
Think of a Train
To visualize this better, think of a train with a long chain of cars that stretches out behind it. Each car on the train represents a block in the blockchain, and each car has a unique number and a list of what it’s carrying. As the train moves along the tracks, new cars get added to the back of the train, and everyone can see the list of what’s in each car.
This train is like a blockchain, and each car is like a block in the chain. Just like the train, the blockchain gets longer and longer as new blocks are added to the chain. And just like the list of what’s in each car, the blockchain has a record of every transaction that has ever taken place. This makes it easy to track what’s been moved from one place to another, and it ensures that everyone can trust the information on the blockchain.
The Supply of Bitcoin is Limited
Here’s where things get really interesting – the supply of bitcoin is limited. That means that there will only ever be 21 million bitcoins in existence, unlike regular money that governments can print whenever they want. This makes bitcoin kinda special and unique.
Bitcoin is also decentralized, which means there’s no one big authority or company controlling it. This makes it more secure and harder to hack or commit fraud. It’s like a bunch of people all around the world are keeping track of the blockchain together, rather than just one group of people.
If you find Bitcoin and other cryptocurrencies super interesting and would like to know more about them, then you might find our reading list helpful: 5 OF THE BEST BOOKS ON CRYPTOCURRENCIES.
