What is Bitcoin?

  • Many people think that Bitcoin is a very confusing thing, even though Bitcoin is something that can be easily understood.

    If asked what bitcoin is (abbreviated as BTC), the simplest explanation is:

    Bitcoin is a decentralized global cash transaction system.

    Based on the journal written by the inventor of Bitcoin is

    A purely peer-to-peer electronic version will allow payments to be sent to other parties without going through financial institutions.

    As we all know, every institution providing financial services (including banks) must have their accounting books. Surely there is time, energy and costs that must be spent to be able to run the transaction. That's why customers are charged an additional charge.

    Bitcoin replaces and changes the cash book system into a global accounting system. Of course, the benefits are reducing time and costs.

    Who Created Bitcoin?

    There are many people who say that Bitcoin was created by someone, even though every major discovery is always made by a group of people (one team).

    Bitcoin was discovered by a team or group of people with the name Satoshi Nakamoto.

    The Bitcoin system designed by Satoshi is open manner, meaning that the programming code can be seen and checked by everyone in the world.

    So, there are no hidden secrets and the creator does not have a conflict of interest.

    Characteristics of Bitcoin

    1. Bitcoin as a payment system

    Have you ever wondered how the payment system took place?

    Thousands of years ago, when humans still did not know the currency, they traded using the barter system.

    For example, they exchange rice with corn and others.

    After humans know the currency (currency), then humans trade using cash.

    The question is how to move money online?

    It must be admitted that the system is indeed quite complicated because banks and credit card services use the system ledger system (cash system).

    The cash system shows history (account history) and shows who (the person) who buys what (currency) and how much (amount).

    Is there a possibility that a bank or a third party will do something wrong? It's always there, therefore the bank carries out a risk management process.

    As a bank customer, certainly, we believe that the bank we use is honest and does not commit fraud.

    The transfer process in one bank is an easy thing to do because the cash system is the same and is in one big system. Problems arise if inter-bank transfers (both domestic and foreign transfers).

    Banks that receive money will certainly match the cash system with the sending bank. Banks must work with a careful system.

    Therefore do not be surprised, if you as a customer subject to transfer fees. Plus there is time (can be direct or wait one day).

    The system will become more complex if in different countries. Banks must match payment systems, regulations between countries, fees, increased transfer times and so on.

    Bitcoin as a Payment Solution

    Bitcoin comes as one of the digital currency solutions. Bitcoin is a cash system that synchronizes across the internet. So, everyone can access the same cash account in real time regardless of who and where he is.

    What are the benefits for you? Money can be transferred from other parties without delay (real-time process) and without high costs. Like when money was used before the world became so big and complicated.

    We can use Bitcoin to send money to friends and family (both locally and abroad), buy goods online, receive salaries and so on.

    Bitcoin makes it easy for us to transfer money. Bitcoin is a payment system, such as bank transfers or credit card methods, but Bitcoin is a little better.

    And with the exchange, you can convert Bitcoin to USD and another currency

    The more people use Bitcoin for payments, the more valuable this payment system is.

    2. Bitcoin as digital gold

    One of the oldest investments is a gold investment. People (from ancient times to the present) see gold as a high-value object.

    Is gold really worth it? Gold itself has no value, gold is only a lump of stone.

    What is the value of gold? It's a bit confusing because everyone agrees gold has a certain value (you can see: today's gold price to know the latest prices).

    Why do people think gold is more valuable than other stones?

    The answer is gold has unit characteristics that make it a "store of value"

    The amount of gold in this world is limited and rare. Gold has soft properties and can be melted and formed into small units.

    Example: gold coins, precious metals 1 gram and so on. Gold is also stable, not degraded, easily recognizable and hard to fake.

    Bitcoin has all the same characteristics as gold, such as:

    • The number of Bitcoin is limited, that is, there are only 21,000,000 Bitcoins in the world.

    • Bitcoin can be broken down into smaller units without losing the value of the unit (1 Bitcoin = 100,000,000 Satoshi - the smallest unit of Bitcoin, same as grams in Gold). We can buy less than one Bitcoin.

    • Bitcoin technology is also stable and will not be facing degradation.

    • Very difficult to make fake Bitcoin, because of the Blockchain system.

    • You can transfer Bitcoins anywhere in the world in minutes, regardless of the number of Bitcoin.

    That's why people refer to Bitcoin as digital gold, but digital gold is better. In essence, Bitcoin is like gold - this is why many people call Bitcoin 'digital gold' or 'Gold 2.0'.

    3. Bitcoin is like the internet

    Is Bitcoin Becoming a Digital Currency Revolution?

    So, if asked, what is Bitcoin? You can imagine a container (bucket) in which there is a debit card (or credit card), gold and internet.

    Everything is one of Bitcoin.