What is Bitcoin, Exactly?
What is Bitcoin?Lesson 2·10 min read
Lesson by Uvin Vindula
Bitcoin is digital money that runs on a decentralized network of computers around the world.
Let's break that down:
Digital: Bitcoin exists only as data. There are no physical coins. It lives on a network of computers.
Money: Like cash, you can send it to anyone. Like gold, it's scarce and can't be created out of thin air.
Decentralized: No single company, government, or person controls it. Thousands of computers (called nodes) around the world each hold a copy of all Bitcoin transactions.
The Bitcoin Network
Imagine a Google Doc that:
- Everyone in the world can see
- No single person can edit alone
- Requires consensus from thousands of computers to update
- Is permanently recorded and never deleted
That's essentially the Bitcoin blockchain.
Bitcoin vs Money in Your Bank
| Feature | Bitcoin | Bank Account |
|---|---|---|
| Who controls it | You (with your keys) | The bank |
| Supply | Fixed at 21 million | Unlimited (can be printed) |
| Hours | 24/7/365 | Banking hours |
| Global | Yes | Often limited |
| Reversible | No | Yes |
| Censorship resistant | Yes | No |
Key Takeaways
- •Bitcoin is digital, scarce, decentralized money
- •It uses cryptography to secure transactions — no trust required
- •The blockchain is a public, permanent record of all transactions
- •You control your Bitcoin — not a bank
Quick Quiz
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What does "decentralized" mean in the context of Bitcoin?