What is Bitcoin?
Digital asset often called Gold 2.0 or Digital Gold
Bitcoin is a digital asset and often called Gold 2.0 or Digital Gold.
Investors in gold view it as a store of value and a hedge against both inflation and the debasement of the US dollar.
Bitcoin offers additional benefits as a digital currency programmed with sound money principles and predictable money supply issuance.
Bitcoin is also a peer-to-peer network of computer nodes running open-source software.
This decentralized system solves the problem of transferring value with no central intermediary.
Transactions are permanently recorded in a fully transparent chronological order to ensure network nodes stay honest and verify to maintain consensus.
Computers work to generate a very large number, like a puzzle piece, and the first to guess correctly is incentivized to group new transactions into blocks.
Fees are earned for each block of data secured with a mathematical function and linked to the previous block of data.
The network is programmed to append the new block to the longest chain of blocks and automatically broadcast updates in real-time.
This innovation prevents the “Double Spend Problem” or the unique risk that digital currency can be spent twice.
Mathematicians and computer scientists struggled to solve this for decades until an academic paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was anonymously published on Halloween 2008 to a mailing list run by cryptographers.
In the middle of a global financial crisis, the first bitcoin was mined on January 3, 2009 creating the genesis block.