Cryptocurrency

A cryptocurrency, is a digital asset or any mean of payment that exists purely in electronic form; it is not tangible, like a euro or a coin. It is designed to be a medium of exchange that uses strong cryptography to secure (financial) transactions, control the creation of additional units and verify the transfer of assets. These cryptocurrencies use a decentralised control, as opposed to centralised digital currencies and central banking system. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, which serves as a public financial transaction database.

Bitcoin (BTC)

The word "Bitcoin" has two meanings: on the one hand, bitcoin, the token, a piece of code that represents ownership of a digital item. On the other hand, you have Bitcoin, the protocol, a distributed network that maintains a ledger of balances of bitcoins (tokens).

Bitcoin was created in 2009 by the mysterious Satoshi Nakomoto, whose true identity has never been discovered. He/She/It outlined its technology in the white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. The system enables payments to be sent between users without a central authority, such as a bank or payment gateway. The supply is limited and controlled by the underlying algorithm, it releases a small number of new bitcoins every hour, and will continue to do so at a diminishing rate until a maximum of 21 million has been reached.

To secure the network and the transactions, the protocol uses a proof-of-work consensus mechanism. It this process, "miners" compete with each others using computer processing power, by repeatedly grouping newly broadcast transactions into blocks, which are then broadcast to the network and verified by recipient nodes.