What is Bitcoin?

By Lumai Mubanga, [email protected]

In his article, I would like to endeavor to answer the question, what is Bitcoin?

In answering this question in future articles, I write about the origins and motivations leading to the development of this crypto currency. Later on, I will touch on a number of important concepts related to crypto currencies.

In future articles, I will also explain the likely dangers related to the use of such a system and how it is similar to the banking system. I will also write about block chain, its effect on the financial, identity, IOT and energy sectors.

So, let us get started. What is Bitcoin?

Before I answer this question, I would like to bring it to the attention of readers that there is a difference between the two terms; “Bitcoin” and “bitcoin”.

Bitcoin with uppercase refers to the protocol that governs the use of the currency, while bitcoin with a lower case is the actual currency.

Note that, bitcoin can also be written as Bitcoin when we consider grammar issues. In this case, I’m answering the question generally both in terms of bitcoin as a currency, and Bitcoin as a protocol.

Firstly, Bitcoin is the first and most widely used crypto currency. Crypto currency is a complete digital currency. It’s not printed on paper nor minted on coins. As such, it is built using the principles of computer science, cryptography and economics. Just like fiat currencies have embedded design features that distinguish them from one another, digital currencies too have similar features. However, the underlying principles of computer science, economics and cryptography are the same across all types of crypto currencies. In this case, Bitcoin has been defined as a protocol, a set of rules that govern the establishment and use of the currency.

Secondly, bitcoin is the actual unit of currency just like the US Dollar or the Euro, except that it’s purely digital. Just like a user of the currency can say, “I have $100 or one hundred dollars”, a bitcoin user will say, “I have 100 BTC or 100 bitcoins”.

Thirdly, we can say bitcoin is the force or inspiration behind the block chain technology. Block chain is the underlying data structure of this cryptocurrency. In this particular case, we are talking about a virtual data structure or format for organizing, retrieving and storing information. The Bitcoin data structure in particular stores a permanent history of all transactions. This cannot be edited or deleted. This is why it is referred to as the append-only Ledger.

Lastly but not the least, bitcoin is some kind of cultural shock. It is a technology that has come to change the way society carries out transactions in particular. The culture revolution will eventually initiate a paradigm shift that will affect all sectors of society. Inspired by the ideals of the Cypherpunks and libertarians, the use of this currency represents a shift toward decentralization and privacy an ecosystem free from governmental, commercial or company control.

End of article.