Bitcoin was developed as an alternative form of payment. It is a peer-to-peer system that allows users to send payments directly to each other without the need for a central bank or government. Bitcoin is different from traditional currencies such as the US Dollar, Euro and British Pound Sterling. It doesn’t rely on banks or governments to provide monetary policy. It is decentralised, meaning it isn’t controlled by any central authority.
Bitcoin was created in 2009 and was the brainchild of an unknown person by the name of Satoshi Nakamoto. He had a passion for cryptography and wanted to develop a system bitcoin based on cryptographic proof that would offer the public a secure method of online transactions. Since then, he has been credited with having created the world’s first decentralized digital currency.
In 2013, the Bitcoin network was created with a distributed group of computers and the system began using its own mining algorithm called SHA-256, which uses data processing to create transactions and blocks.
The Bitcoin network relies on two methods to generate new bitcoins. One is when a user makes a transaction in exchange for goods and services. The other is when a miner completes a block.
If the Bitcoin network needs to validate the block, miners must add new blocks to the end of the chain. These miners are rewarded with 25 new bitcoins after the block is validated.