Some Bitcoin Basics To Help You Get Started
Who invented Bitcoin?
Satoshi Nakamoto is credited as Bitcoin‘s inventor and drafted the original 2009 Bitcoin whitepaper which is essentially an official company roadmap that contains the most simple and accurate description of Bitcoin. Bitcoin goes by many names: ‘digital cash’; the first ‘cryptocurrency’; an international payment network; and ‘the internet of money’. Bitcoin is revolutionizing the way people think about and use money. On August 1, 2017, a new version of Bitcoin called Bitcoin Cash (BCH) was released that maintains the fast, inexpensive qualities of network transactions.
What is Bitcoin Cash (BCH)?
Simply put, Bitcoin Cash (BCH) is a peer-to-peer electronic cash system. It is comprised of a consensus network capable of a new type of payment method which utilizes a completely digital form of money. BCH is a decentralized peer-to-peer payment network is powered by its users with no central authority or middlemen whatsoever.
What is Bitcoin Core (BTC)?
Bitcoin Cash was formed by creating a ‘fork’ or split of the Bitcoin network resulting in two versions of the Bitcoin network: Bitcoin Cash (BCH) and Bitcoin Core
(BTC). Bitcoin Cash maintains the speed and affordability of Bitcoin transactions; it is the version of Bitcoin described in the Satoshi Whitepaper.
Bitcoin Core, however, is the slow, expensive version of Bitcoin that no longer functions as money. Its future is unclear as its development team is not interested in scaling the network on the Bitcoin blockchain instead opting for third-party, centralized solutions like ‘The Lightning Network’. Despite several years of development and countless promises, ‘The Lightning Network’ hasn’t fixed Bitcoin Core’s scaling problems.
‘Bitcoin’ is Bitcoin Cash
Bitcoin Cash represents Satoshi Nakamoto’s original concept of a peer-to-peer electronic cash system. Bitcoin Core no longer represents those ideals and so it is the official position of Bitcoin.com now that ‘Bitcoin’ is Bitcoin Cash. This sentiment is shared among the majority of early users and enthusiasts. Bitcoin Cash is the solution for borderless, instant, cheap payments. It remains unclear right now what BTC’s value proposition given its high fees and slow transaction times.
Bitcoin is brilliant in that it requires no central servers or third-party clearing houses to settle transactions. Instead, alll payments are peer-to-peer (P2P) and are settled in about 10 minutes as compared to credit card payments which can take up to months before they’re fully settled.
All Bitcoin transactions are recorded permanently on a distributed ledger called the “blockchain” which is shared between all full Bitcoin “miners” and “nodes” around the world. Blockchain is publicly-viewable. These miners and nodes verify transactions in order to keep the network secure and are compensated with new bitcoins with each 10-minute block (currently 12.5 BTC per block).
The Bitcoin protocol is also hard-limited to 21 million bitcoins. This means that there can never be more than 21 million bitcoins ever mined so no bank, individual or government can simply ‘print’ more bitcoins as deemed necessary. As a result, Bitcoin is considered a deflationary currency and is likely to increase value based on this alone.
Bitcoin is still a cutting-edge experiment in technology and economics. Like the world wide web in 1995, Bitcoin’s myriad applications and utilities are not yet fully discovered. Bitcoin.com asks us: “Is it just electronic money? A foundation for smart contracts and electronic shares? Is it underground and subversive, challenging the power of governments, or will it integrate into mainstream finance and go unnoticed? If you know the answers to any of these questions… there may be many lucrative opportunities for you in the Bitcoin space!” Although humorous, the statement rings true because Bitcoin’s full potential has yet to be realized.
Like all financial markets, Bitcoin is fast paced and ever changing. The only way to stay is to follow the news and discuss the latest events with other investors. However, if you simply wish to use Bitcoin as a currency for goods and services then you really can just dive right in.