What is Bitcoin?

Who invented Bitcoin?

Bitcoin Core‘s (BTC) inventor, Satoshi Nakamoto, outlined what Bitcoin Core is in the original 2009 Bitcoin whitepaper—a document which created the roadmap
for BTC. To date, this is still the most simple and accurate description. Bitcoin Core is also known as ‘digital cash’, the first ‘cryptocurrency’, an international payment network, and ‘the internet of money’—but whatever you call it, Bitcoin Core is a revolution that is changing the way people think about and use money. On August 1, 2017, a new version of Bitcoin was released that preserved the fast, inexpensive qualities of network transactions. This version is called Bitcoin Cash (BCH).

(Update: Bitcoin Core is less usable as money due to much higher fees and delayed transaction times. The Core team has also expressed an interest in keeping these fees high since they view BTC as a “store-of-value” and not something to be transacted on a daily basis. In contrast, Bitcoin Cash’s transaction fees cost pennies and payments can be validated even with zero confirmations. These facts make BCH the ideal cryptocurrency for sending and receiving money anywhere in the world.)

What is Bitcoin Cash (BCH)?

Bitcoin Cash (BCH) is a peer-to-peer electronic cash system. It is a consensus network that enables a new type of payment method and a completely digital form of money. It is a decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen.

What is Bitcoin Core (BTC)?

The creation of Bitcoin Cash required a ‘fork’ or split of the network that resulted in two versions of the Bitcoin network: Bitcoin Cash (BCH) and Bitcoin Core (BTC). Bitcoin Cash preserves the instant, exceedingly cheap qualities of Bitcoin transactions and is the version of  Bitcoin described in the Satoshi Whitepaper.

Bitcoin Core, meanwhile, is the slow, expensive version that no longer functions as money. The future of Bitcoin Core is unclear as its development team is not interested in scaling the network on the Bitcoin blockchain but has opted for third-party, centralized solutions such as ‘The Lightning Network’ which, despite several years of development and countless promises, has failed to solve the scaling problems faced by Bitcoin Core.

Bitcoin Cash and Bitcoin Core compared

‘Bitcoin’ is Bitcoin Cash

Bitcoin Cash represents the original idea and vision of a peer-to-peer electronic cash system. Bitcoin Core no longer represents such a system. Therefore, it is the position of Bitcoin.com and many longtime members of the community that ‘Bitcoin’ is Bitcoin Cash. Make no mistake, BCH is not BTC but Bitcoin Cash is the solution for borderless, instant, and cheap payments while it remains unclear what BTC’s value proposition currently is in the face of high fees and slow transaction times.

The beauty of Bitcoin is that it requires no central servers or third-party clearing houses to settle transactions – all payments are peer-to-peer (P2P) and are settled in about 10 minutes – unlike credit card payments, which can take weeks or months before they’re finally settled.

All Bitcoin transactions are recorded permanently on a distributed ledger called the “blockchain” – this ledger is shared between all full Bitcoin “miners” and “nodes” around the world, and is publicly-viewable. These miners and nodes verify transactions and keep the network secure. For the electricity they use to do this, miners are rewarded with new bitcoins with each 10-minute block (the reward is currently 12.5 BTC per block).

The Bitcoin protocol is also hard-limited to 21 million bitcoins, meaning that no more than that can ever be created. This means that no central bank, individual or government can come along and simply ‘print’ more bitcoins when it suits them. In this sense Bitcoin is a deflationary currency, and as such is likely to grow in value based on this property alone.

Bitcoin is still a cutting-edge experiment in technology and economics, and like the worldwide web in 1995, its myriad potential, purposes and applications are yet to be decided. Is it just electronic money? A foundation for smart contracts and electronic shares? Is it underground and subversive, challenging the power of governments, or will it integrate into mainstream finance and go unnoticed? If you know the answers to any of these questions, or if you can figure out how to capitalize on them there may be many lucrative opportunities for you in the Bitcoin space.

The Bitcoin universe is changing fast and often – to stay ahead of the game it’s necessary to follow the news and discuss the latest events with other members of the community. Bitcoin.com aims to be a reliable information hub for beginners and industry insiders alike. That being said, ‘staying ahead of the game’ is not a necessity if you simply wish to use Bitcoin as a currency to purchase goods and services, or wish to accept Bitcoin for transactions – something thousands of people around the world do every single day.