What is Bitcoin?

To cut through a number of the confusion close bitcoin, we'd like to separate it into 2 elements. On the one hand, you have got bitcoin-the-token, a piece of code that represents possession of a digital thought – variety of sort of a virtual note. On the opposite hand, you have got bitcoin-the-protocol, a distributed network that maintains a ledger of balances of bitcoin-the-token. each area unit cited as "bitcoin."

The system permits payments to be sent between users while not passing through a central authority, like a bank or payment entranceway. it's created and control electronically. Bitcoins are not written, like bucks or euros – they are created by computers all round the world, victimisation free computer code.

It was the primary example of what we tend to these days decision cryptocurrencies, a growing quality category that shares some characteristics of ancient currencies, with verification supported cryptography.