What is Bitcoin?
Bitcoin is a digital currency; its creation and transfer is based on an open source protocol encryption network that is totally independent from any central authority. A Bitcoin can be transferred by a computer or a smartphone without the use of any intervening third party or intermediate financial institution. The concept was introduced in 2008 on a white paper published by a pseudonymous programmer named Satoshi Nakamoto, in what was defined as a peer-to-peer electronic payment system. The Network was turned on by Satoshi on the 3rd of January 2009.
Bitcoin can be used for payments similarly to the dollar (or other currency). Due to the mathematical characteristics of Bitcoin, it has an immense potential due to its multi-divisible properties enabling micro values to be sent with virtually no cost. Bitcoin opens the door to many possibilities and services that have not been imagined.
Bitcoin is an efficient solution when it comes to tipping or making donations over the internet. Donations can be visible to the general public enabling a better financial solution and greater transparency for non-profit organizations. Also in Emergency situations such as natural catastrophes, donations in Bitcoin arrive faster to those in need thus reducing the international response time as well as being extremely effective as a frictionless way of value transfer.Though there are still very few initiatives, we can already see the first crowdfunding projects related to Bitcoin pop up more frequently.
Bitcoin allows pseudonymous transactions and transfer of property and other values. Bitcoins can be stored on a computer inside special software that stores the encrypted keys, or on an online wallet provided by third parties; in both cases Bitcoins can be sent over the Internet to anyone who has a Bitcoin address.
The p2p topology of the Bitcoin network and the absence of a central management entity make it impossible for any authority, government or institution, to control the distribution and issuance of Bitcoin.