What is Bitcoin?
Bitcoin is digital money that runs on a distributed network of computers. Sometimes people use the word Bitcoin to refer to other things: the currency itself, the decentralized public ledger its transactions are recorded in, the Bitcoin protocol with which the computers communicate, or simply the ecosystem that includes all of that.
Bitcoin as peer-to-peer (P2P) digital currency is sometimes referred to as bitcoin (with lower “b”) or simply BTC. Bitcoin is a cryptocurrency, which means it is a digital currency that is protected by cryptographic techniques. It was the first cryptocurrency that came into existence, and the first Bitcoin transaction block – known as the genesis block was mined on the 3rd of January 2009.
The Bitcoin decentralized public ledger that records all transactions independently and without the need of a central institution is called the (Bitcoin) blockchain. Despite being closely related, Bitcoin and blockchain are different concepts. The blockchain data structure and the mining process is what allows Bitcoin transactions to be broadcasted and recorded in a trustless and secure way. Trustless means that the blockchain system does not rely on any kind of trust to function as it is backed by mathematical algorithms and a network of thousands of computers checking each other. Thus, the Bitcoin blockchain works as a decentralized digital ledger that publicly lists all confirmed BTC transactions.
The term Bitcoin is also used to describe the underlying open source software upon which this network of computers runs and which it uses to communicate. In 2014, however, the original Bitcoin client software was officially rebranded to Bitcoin Core to avoid further misunderstanding. There are many other later forks, i.e. branches off the original Bitcoin code and many new implementations with different features all which are called cryptocurrencies.
Bitcoin was conceptualized by Satoshi Nakamoto. It was his idea to create a unique digital payment system that would permit borderless financial transactions to occur without the need for mediators like banks or governments. The distributed architecture provided by blockchain technology, along with the cryptographic techniques, makes Bitcoin very resistant to attacks and fraud.