What is Bitcoin (BTC)?

Bitcoin is virtual money that can be sent from one person to another, digitally, without a central bank or single government controlling it. It can also be an investment vehicle or a store of value.

A little bit more detail

Bitcoin (BTC) is a form of digital currency that was founded during the financial crisis of 2008. It’s assumed Bitcoin was created in reaction to the widespread anger and frustration at our current financial system.

The first known hint of its existence comes from August 2008, when the domain name for bitcoin.org was registered. A few months later, subscribers to a cryptography email list received a paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System, and a person, or group, using the name Satoshi Nakamoto, was listed as the author.

Its first public appearance was in January 2009, when Satoshi Nakamoto released the open-source code for the software. This unveiled the first block of the Bitcoin blockchain.

Since then, Bitcoin has become the preeminent and most widely recognised cryptocurrency.

• Bitcoin is global - It can be sent to someone, anywhere in the world - 24 hours a day, 7 days a week, 365 days a year - as easily as handing cash to them.

• Bitcoin is decentralised - Unlike fiat currency, which is centralised in banks and controlled by governments, Bitcoin is controlled by a network of users who control and verify transactions. The Bitcoin network has tens of thousands of nodes across the world that keep track of all transactions happening on the system.

• Bitcoin transactions are irreversible - Meaning Bitcoin transactions cannot be reversed by the sender. Also, they cannot be amended by any third party, such as a government entity or financial services institution.

• Bitcoin is open - Every single transaction on the bitcoin network is published publicly, with no exception. These published transactions are anonymised, meaning that they don’t contain any personally identifying info, other than the bitcoin addresses and the amounts.

• Bitcoin is secure - When each bitcoin transaction is confirmed as unique, it’s sent to join a ‘block’ of other transactions and becomes impossible to modify. Together, these blocks form the blockchain. Cryptography in blockchains is used to sign the data with a unique, unbreakable identifier that other network participants can verify using the same cryptography algorithm.

To find out how you can keep your Bitcoin safe at Luno, check out our security articles here.