Guest Post: By Adrian Przelozny | CEO | Independent Reserve
Bitcoin and blockchain technologies have received a lot of press coverage in recent times, and it is important to understand the relationship and differences between the two.
In this article, we aim to explain and demystify some of the key concepts underpinning these technologies.
Bitcoin is a Digital Currency and a peer-to-peer payment network. Transactions are verified by nodes on the network, and stored on a global, public ledger called the blockchain.
A bitcoin refers to a unit of account on the blockchain. It is a digital currency created and held electronically, that is produced by people running specialised computers all around the world. This creation process is referred to as ‘mining’ and consists of using computing power in the distributed network to solve mathematical problems. The mining process is very computationally intensive, and it is what provides security for all the transactions on the Bitcoin network.
Bitcoin is decentralized and completely transparent, thanks to the Bitcoin blockchain, which stores details of every single transaction that has ever occurred on the network. There are many free websites available online, where anyone can inspect and view any transaction which has ever taken place on the Bitcoin network.
Bitcoin was created in 2009, by a pseudonymous programmer (or group of programmers) known as Satoshi Nakamoto. Satoshi’s true identity has never been verified. However, as Bitcoin was released to the world as ‘open source’, it is possible for any skilled programmer to work and contribute to Bitcoin. Currently there are hundreds of programmers around the world collaborating with each other to further improve and enhance the capabilities of Bitcoin.
Let’s dive a little bit deeper into some of the key concepts behind Bitcoin.