Bitcoins are a class of cryptocurrencies, meaning that they use encryption techniques to validate transactions. They are both created and held electronically. Bitcoin transactions do not need a centralized agency like a bank to mediate fund transfers. Any kind of transaction authentication using bitcoins is done using a secret key that lies with the holder.
Who started Bitcoin?
Bitcoin was started by Satoshi Nakamoto. Till date it remains unknown whether Nakamoto is an individual or a group of software developers, because they have chosen to keep their identity anonymous. Satoshi Nakamoto could have decided on anonymity to avoid adverse legal consequences, if any.
It is however presumed that Satoshi Nakamoto is a genius coder to have created the near-perfect Bitcoin alogorithm. Nakamoto has also written extensively about his invention. Bitcoin – A Peer To Peer Electronic Cash System was published just before the bitcoin software was made public.
Why Bitcoin became Popular?
1. Bitcoin transactions are independent of any centralized system. This means that one can maintain his/her anonymity while transferring funds. This form of currency is also popular among those who do not wish to have their monetary transactions mediated by a bank or agency.
2. The bitcoin protocol uses a blockchain technology. A blockchain is a decentralized ledger that contains blocks or records of any transaction that took place within the network. A copy of this blockchain is replicated across all computers connected to the network.
3. Another reason for bitcoin’s popularity is because its value is not determined by conventional market values. The number of bitcoins is limited to 21 million, and the evaluation mostly depends on the demand and supply of these cryptocurrencies.
Bitcoins can thus be used in place of traditional currencies, without a central validator or payment gateway and absolutely maintaining the user’s anonymity. The current value of one unit of this cryptocurrency passed a whopping $11,000. These are also good for short-term investments. No doubt bitcoins are a popular currency choice for many these days.