What is it?
Bitcoin is a cryptocurrency which is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.
Bitcoin, created in 2009, was the first decentralized cryptocurrency.
Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers.
In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.
- Not centrally controlled
- It is very difficult to track individual bitcoins
- Uses modern technologies: p2p networking, digital cryptography
- Few regulation
- Nascent development
- Danger of bubble in value
- Multiple competitors
- Not a lot of everyday uses for it (e.g. you probably can’t just buy a pizza on the high street with it)
A number of the pros are also cons and vice versa. However, cryptocurrencies are definitely here to stay and are getting a lot of media coverage recently.