What is bitcoin and cryptocurrencies?
Digital money is not a new invention. Thanks to online banking and credit cards, we don’t have to use paper money to pay for goods anymore. However, the financial system is still far from being perfect: Hyperinflation and lack of access to financial services still burden the life of millions.
Imagine a global, digital currency that is created and supervised by people instead of a central authority. Bitcoin is the first and most well known decentralized cryptocurrency. “Crypto” means that bitcoin uses cryptography to make sure that the network only records and allows valid transactions and no user can cheat the system. But that’s not all:
New bitcoin is released at a predictable rate and has a maximum supply of 21 million units which makes it resistant to inflation. It can’t be counterfeited, it can’t be double spent, it is globally available and can’t be controlled by banks or governments. Cryptocurrencies like bitcoin enable international payments without extra fee or time delay and can be divided into tiny amounts which enables micropayments.
Bitcoin (BTC) is one example of cryptocurrencies but there are others such as Bitcoin Cash (BCH), Litecoin (LTC), Ethereum (ETH) and many more.