What is Bitcoin?| North Loop Official Blog
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North Loop
18 Jan 2021

What is Bitcoin?

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History of Bitcoin -

The principles of Bitcoin first got published online in a white paper in late 2008 by a person or group with the name Satoshi Nakamoto. Even though this paper was not the first idea for digital money relating to cryptography and computer science, it was very different and unique in its solution to establishing trust between various online entities.

What Is Bitcoin?

Bitcoin is a decentralised cryptocurrency that uses peer-to-peer technology for instant payments between people of businesses. In other words, Bitcoin is a form of digital currency that is created and held electronically on a computer.

Unlike paper money like dollars, euros or yen that get controlled by monetary authorities, Bitcoin is produced by people and businesses worldwide using advanced computer software that solves mathematical problems. It has several financial attributes that set it aside from traditional currencies as a pan-global means of exchange.
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Features of Bitcoin -

Bitcoin is legal - This cryptocurrency is lawful to use, hold and trade. You can use it to spend on anything ranging from shopping to charitable donations. Many businesses also accept Bitcoins as payment, some of these being Microsoft and Expedia.

Native to the internet - Unlike government-issued currencies such as dollar or euro, Bitcoin is a currency native to the internet and allows online transfers without a middleman such as a bank or payment processor. These reasons also give it more potential to move around the global internet quickly and cheaply. It provides it with a whole range of new possibilities that include giving maximum control over your assets.

Bitcoin is money - Even though Bitcoin exists only digitally and has no physical version to it, it gets used as a medium of exchange or a store of value which are all properties of money.

How Bitcoin works -

Bitcoin does not flow through the traditional banking system and instead, flows from one computer wallet to another. Unlike credit card networks like Visa and payment processors like Paypal, it is independent of any individual or company ownership.

It is also independent of governmental authorities that control the money supply and availability of currency across the global market. Bitcoin is essentially the world’s first completely open payment network which you can participate in via an internet connection. It also does not depend on any other entity to process transactions.

A key feature of Bitcoin is blockchain. Blockchain tracks the ownership of assets, similar to how a bank functions. However, the difference lies in the fact that Bitcoin blockchain is decentralised, and no single entity controls it.

Moreover, unlike a bank’s ledger, anyone can view it. The virtual ledger or blockchain is essentially a chronological list of transactions copied across every computer connected to the Bitcoin network. It is secured using a vast amount of computing across the globe and is a powerful and adaptable concept. The Bitcoin Blockchain mainly records Bitcoin transactions and private keys.

What is the mining of Bitcoins?

The process of solving advanced mathematical problems results in the mining of Bitcoins. Since these are divisible, the growth potential for this exchange medium is unlimited.

The blockchain or Distributed Ledger Technology that tracks Bitcoins and allows immediate transfers of Bitcoin also has tremendous potential, especially in traditional operations and settlements for businesses in finance and other industries.

Some facts about Bitcoin -

Bitcoin has been around since 2009. It hit an all-time high price in November 2017. During that time, 1 Bitcoin was worth nearly $20,000.

The value of Bitcoin first surpassed $1000 in January 2017. Since then, it continued to fluctuate ranging, from a little more than $3000 to greater than $16000.

Alternatives to Bitcoin -

Bitcoin is not the only cryptocurrency available in the market. However, it may get called one of the largest cryptocurrencies. That is because of its market cap, which is more than twice the value of the next ten largest cryptocurrencies combined. In all, there are 14 different cryptocurrencies with market caps of at least $1 billion.

How to get Bitcoin?

The easiest way to buy Bitcoin is to purchase it through an online exchange or a digital online platform. You can choose one that easily allows you to buy, sell, send, receive and store Bitcoin without needing to hold it yourself.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.