Bitcoin is a digital, decentralized currency. The most distinctive feature of this form of money is that it does not rely on a central bank or government. They cannot value or issue it, and therefore it is often referred to as a “cryptocurrency.” Bitcoin is based on a technology called the blockchain, which is a shared public ledger that records all the transactions occurring in the Bitcoin network.
The blockchain ensures users have complete control over their money and eliminates the ability of third parties to intercept or change transactions. At the heart of the Bitcoin system is the token known as “BTC,” which is the actual bitcoin used for transactions and not Bitcoin as the entire system itself.
This token is what allows Bitcoin users to make and receive payments, and it serves as a form of incentive for miners to process and validate transactions. One BTC is equal to 100 million satoshis – the smallest fraction of a Bitcoin. Every BTC consists of individual transactions within the blockchain that track the transfer of funds from one wallet address to another.
It is important to remember BTC is not physical money; instead, it is a digital record of ownership stored on the blockchain. Any user can obtain BTC by either mining or purchasing it from an online exchange. Bitcoins are divisible up to 8 decimal points and can be used to purchase goods and services, send money to other individuals, or even make donations.
As Bitcoin has become more widespread and its value has increased, more merchants are beginning to accept it as payment.