Bitcoin for Beginners

The world’s first widely-adopted cryptocurrency. With Bitcoin, people can securely and directly send each other digital money on the internet.

What is BitCoin: Decentralized Money, Cryptocurrency or Digital Gold

Bitcoin is a Cryptocurrency or Digital Currency launched in 2008, same year as the global financial crisis. On 01 Nov 2008, Satoshi Nakamoto published the whitepaper "Bitcoin: A peer-to-peer electronic cash system". The paper abstract states: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution".

Bitcoin is a digital currency without a government, no owner and crowd funded. It allows for peer-to-peer transaction which means two individuals can exchange money without the need for an intermediatary like your Bank, Visa, Paypal, Western Union and others. Every bitcoin transaction is tracked on the blockchain - which is an open ledger similar to your banks ledger but viewable by anyone. Record of every transaction from begining of Bitcoin network is recorded on the "Bitcoin Blockchain"

What is FIAT Money and Centralized Currencies

We need to start with the understanding of money, which is a medium of exchange, that holds an acceptable value between the transacting parties. In order to drive a legal and commonly acceptable medium of exchange, governments float currencies that stores value, which is promised by the government which issued the currency. This makes such currencies centralized, since they are controlled and government by a central entity and in this case, the Government of the country which issued this currency.

Domestic currency issued by the Government of that country solves the problem of medium of exchange locally within a country, but in order to facilitate the exchange across the globe, Bretton Woods agreement was established in 1944. The agreeement required the currencies of participating countries to be pegged to the price of Gold and US Dollar as a reserve currency linked to the price of Gold.In 1971, United states terminated convertibility of USD into equivalent value of Gold. This in turn dismissed the "promise" of exchanging currency with an equivalent value of Gold, leading the currency to FIAT Currency.

Why Bitcoin, what is the purpose of Decentralized currencies

Bitcoin enables a mechanism of transfer of value over internet, which was not possible before its invention. Its a technological solution utilizing several technological innovations that were developed over the past few decades.Prior to Bitcoin and other Decentralized currencies that followed it, the two major forms of payment were:

• Cash Payments: Which had a major drawback, that all parties participating in the transcation needs to be physicaly present

• Using Intermediaries: Google Pay, Paypal, Phone Pe, Credit Cards and others

Intermediaries were the prominent way of transcating online and digitally, primarily due to the double‐spending challenge. Digital entities can be replicated endlessly which was a major obstacle for creating a digital currency, as sending them will only duplicate them. It was not possible to guarantee that, the sender was not spending the same currency to multiple people (double-spending), unless there was a trusted third party overseeing the account and the transactions.

Bitcoin and other Decentralized currencies that followed, solved this double-spending problem by a confirmation mechanism and maintaining a common, universal ledger system. The bitcoin blockchain retains records of time-stamped transactions going back to the founding of the cryptocurrency in 2009.

What are Sats and Total Number of Bitcoins

Total Number of Bitcoins will be always 20 Million (20,000,000). This cannot be changed. To enable smaller transactions, Satoshi divided each bitcoin into 100 Million (100,000,000) units, which were later named satoshis in his pseudonymous honor. “Sats” is short for Satoshis.

The satoshi or sats is currently the smallest unit of the bitcoin currency.

1 Satoshi = 0.00000001 BTC 1 Sats = 0.00000001 BTC

What was the first Bitcoin based transaction

Bitcoin founder Satoshi Nakamoto made the first cryptocurrency transaction, sending Hal Finney 100 bitcoins on January 12th, 2009.