What is Bitcoin?

What​ ​is​ ​Bitcoin?

The protocol of Bitcoin was first described in Satoshi Nakomoto’s whitepaper “Bitcoin: A Peer-to-Peer electronic cash system”. Bitcoin’s protocol and its design can be considered to be the origin of many of the other cryptocurrencies that exist to this day, including Ethereum and other ICOs. Many other cryptocurrencies have similar properties as Bitcoin. Bitcoin was designed by Satoshi Nakomoto to be a decentralized digital currency (or cryptocurrency) to make payments over a communications channel without a trusted third party.

Bitcoin was the first of its kind, and paved the way for many other cryptocurrencies that followed. Bitcoin was designed to be an electronic payment system that is based on cryptographic proof instead of trust, allowing any two willing parties to transact with each other without the need of a third party, such as PayPal. This allowed anybody to transact with another person without having to go through the various regulations and restrictions that third parties can often put on their clients. Furthermore,

Bitcoin was designed in such a way as to be computationally impractical to reverse, which would help protect sellers from fraud

The​ ​Cryptocurrency

Bitcoin is a peer-to-peer spending transaction network that uses proof-of-work to record a public history of all transactions on the network. It quickly becomes computationally impractical for an attacker to change the public history of transactions if honest nodes control a majority of CPU power. Nodes work all at once with little coordination, and can leave and rejoin the Bitcoin network at any time, accepting the proof-of-work chain as proof of what happened while they were gone.

Timeline

Bitcoin was created by Satoshi Nakamoto, who published his invention on October 31st, 2008 to a cryptography mailing list Satoshi Nakamoto implemented Bitcoin as open source code and released it on January 2009.

On August 6th, 2010, a major vulnerability was found in the Bitcoin protocol. Transactions not properly verified were included in the blockchain, which let users bypass bitcoin’s economic restrictions. On August 15th, the vulnerability was exploited and 184 billion Bitcoins were generated. Within a few hours, the transaction was erased from the transaction log and the network forked to an updated version of the Bitcoin protocol.