What is Bitcoin and How to Use It

History Of Bitcoin

Satoshi Nakamoto, the creator of Bitcoin, supposedly began working on the concept of Bitcoin in 2007. No one knows whom Satoshi is, or if Satoshi is a collective of several people (more on that later). The general consensus of the Bitcoin community is that ‘Satoshi’ is a person living in Japan, but that can be disputed as well.

Bitcoin is an open source p2p form of digital currency.

What exactly does that mean?

Bitcoin for the first time, is a currency that is truly the people’s currency, with no government or central figure controlling cash production, inflation, etc. In fact, Bitcoin takes a deflationary model where storing Bitcoin should in fact increase value as only 21 million of them are ever going to exist, and there will be no replacements so ones lost will forever be lost.

It’s also p2p, or peer to peer. This means that when sending or receiving money it goes directly from person A to person B, meaning no middleman, little to no fees, and faster transaction times. Like how email revolutionized the way we send and receive mail, Bitcoin will change the way we send and receive money.

Arguably more important than Bitcoin it is the blockchain. The blockchain is the public ledger for cryptocurrencies, and keeps track of every transaction made. This is publicly available, and anyone can view it.

Also many things can be built on top of the Bitcoin blockchain, such as colored coins. These still have the security and basic features like 10 minute block times akin to Bitcoin, but they can represent completely different things. This network is maintained in a decentralized manner, with everyone essentially pitching in. The ability for a single entity to control the network is discouraged, with someone needing 51% or more of the mining machines to attempt this.

It’s also pseudo-anonymous. Using Bitcoins keeps your transactions safe as it’s more difficult to track transactions going from string of digits to a different string of digits (addresses). You can even use mixers or other services to make your transactions even harder to track.

How to Use Bitcoin

Using Bitcoin is rather easy, and if you have used online payment systems before like Paypal, you should be familiar with the procedures. There are some key features that make Bitcoin different than the aforementioned Paypal and other online payment systems.

Before you can use Bitcoin, there are two things you need. First is a wallet. A wallet is an application that you run on your computer, in the web, or on your phone and it stores your private keys and addresses. These are two fundamental parts of what makes a bitcoin transaction work, so make sure you have a working and up to date wallet before proceeding.

The second part you will need is Bitcoin itself. There are a multitude of ways to get Bitcoin, from buying them outright from exchanges or companies to receiving them from selling goods or services. It doesn’t matter how you get Bitcoin, but once you get your first Satoshi’s, it’s a lot easier to get Bitcoin after that.

As stated before, Bitcoin is unlike any online payment system that has existed before Bitcoin. For one, Bitcoin is controlled by no central figure, relying on everyone to host nodes and mine to keep the Bitcoin network and its transactions running smoothly. Second of all, instead of using names, when sending or receiving Bitcoins you provide an address, or a string of letters and digits which you put in the send to box.

In summary, all that is needed to start using Bitcoin is Bitcoin itself, a wallet, and an address. You need the Bitcoin so you can transact currency, a wallet to send it from, and an address to direct where you are sending it. Transactions should be instant, with confirm times every 10 minutes or so. When you get the hang of it, Bitcoin becomes just like sending emails.

Who Is Satoshi Nakamoto?

According to Satoshi’s Bitcoin Foundation account, ‘Satoshi’ is in his 40s now and lives in Japan – however there is no way to validate that information. The anonymity behind ‘Satoshi’ exactly expresses what Bitcoin is attempting to create. An anonymous peer-to-peer currency that is tracked by no one, yet transparent enough for the public see at the same time.

Many people debate over who Satoshi Nakamoto actually is and disregarding Newsweek’s article that they found the real Satoshi Nakamot living in California in their notorious article ‘The Face Behind Bitcoin’. There are several theories that Satoshi could be a joint effort between Samsung, Toshiba, Nakamichi, and Motorola and that these companies together created Bitcoin.

On August 15, 2008 Three people filed a patent for encryption application; Neal Kin, Vladimir Oksman, and Charles Bry. One intrepid researcher, Adam Peneberg, cross-referenced phrases from the patent application and the Bitcoin white paper.

The phrase “computationally impractical to reverse” matched with both the patent application and the Bitcoin white paper. Furthermore, the domain name for Bitcoin’s official website, bitcoin.org, was registered 3 days after the patent application was filed. Additionally, the patent was registered in Finland, where one of the patent authors traveled to 6 months before the domain was registered.

Unsurprisingly, all 3 authors adamantly denied the accusations. In fact, all possible identities of Satoshi have been strongly denied. We may never know the true identity of “Satoshi Nakamoto”.

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