What is Bitcoin?

What is Bitcoin?

Bitcoin is the first decentralized digital currency. Users of this electronic money can securely send online payments directly to a “trusted” third party (such as a bank) to process financial transactions, reduce commission fees and eliminate fraud.

Origin of Bitcoin

In 2008, a person (or group of people) under the pseudonym Satoshi Nakamoto published an article titled Bitcoin: The Peer-to-Peer Electronic Cash System. This article outlines a digital payment system where users can send and receive peer-to-peer transactions without the need for a third party such as a bank to verify transactions. This digital payment system is known as Bitcoin. Bitcoin relies on the worldwide network of miners to provide the computing power that the Bitcoin network actually runs on.

Satoshi Nakamoto had three main goals:

1. Decentralized networks of miners will prevent seizure of power and keep the system secure and democratic

2. Miners will be less likely to commit malicious and misrepresenting transactions, creating an incentive to act in the best interests of the network.

3. In the traditional financial system, banks act as intermediaries and have to verify the validity of transactions. Agents always charge (possibly a large amount) to provide this service.

Bitcoin removes the need for a centralized system around banks, making peer-to-peer transactions cheaper, more efficient and more accessible.

How do you buy Bitcoin?

Bitcoin can be easily purchased on the Coinpara platform. Similar to foreign currencies, Bitcoin can be purchased for TL or Dollars, which is determined as a function of supply and demand. Once purchased, Bitcoin can be used as a medium of exchange to purchase other goods or services or held as an investment.

Where do you hold Bitcoin?

After purchasing Bitcoin (BTC), it can be kept in a wallet (digital or hardware) but also in Koinxbt's secure wallets. There are many security risks involved in keeping it in your own wallet.

Why is Bitcoin important?

One of the most use cases for Bitcoin is money transfer. A remittance payment occurs when a person living outside their home country sends money home to friends or family. Sending remittance payments today can be extremely expensive. In the 2014 Ted Talk, economist Dilip Ratha estimated that the average global cost to send money is about 8%. This number increases when sending money to certain parts of the world – Africa, for example, costs 12% on average. By using the Bitcoin network for remittance payments, individuals can reduce the costs associated with remittance payments, making Bitcoin an attractive alternative to banks and other traditional ways to transfer money.

The creation of Bitcoin has also triggered the rise of many other cryptocurrencies. We live in an ecosystem of more than 2,000 digital currencies. Cryptocurrencies have also led to the development of new money (capital) raising models. Through the issuance of ICOs (cryptocurrencies), startups and even larger companies like Kodak issue cryptocurrencies to raise capital, challenging traditional fundraising models such as venture capital.