What is Bitcoin
Last updated
Last updated
Bitcoin is a digital currency (medium of exchange) and a limited supply asset (store of value) at the same time. It is a currency because you can send it as value to another person or use it to pay for goods and services. It is an asset because it has a fixed, limited supply which cannot be controlled or manipulated. This programmable money which cannot be altered also ensures that the supply of bitcoin is fixed and can never be more than 21 million bitcoin.
Bitcoin is a financial invention and innovation that is designed to create financial freedom, freedom to send & receive value, and freedom to store value in a censorship-resistant way. Bitcoin emerged from the ashes of the global financial crisis in 2008 when a group of anonymous coders (referred to as Satoshi Nakamoto) created a monetary network that would not be centrally controlled by any Government or institution. This is made possible through the decentralised technology of the bitcoin blockchain.
Bitcoin is created through something called proof of work consensus, a mining mechanism where powerful computer networks all around the world spend energy solving complex mathematical problems to secure and validate the system. At this point you are probably getting a bit overwhelmed so to simplify, Bitcoin is not created from thin air but through a process called mining (millions of computers around the world). There will only ever be 21 million Bitcoins, we dive deeper in How Bitcoin is created.
The decentralized nature of Bitcoin also eliminates the potential for a single point of control or supply manipulation, making it more resilient than traditional currencies.
"Sats" is short for "satoshis", which is the smallest unit of Bitcoin. It's named after Satoshi Nakamoto, the pseudonymous person or group of people who developed Bitcoin. One Bitcoin (BTC) is equivalent to 100 million Satoshis. Sats is to Bitcoin what kobo is to the Naira, or cents is to the Dollar.
For instance, instead of saying "0.00005 BTC", you could say "5,000 sats.
1,000 Sats is still 1,000 sats, the same way 1 BTC is still 1 BTC next year and beyond.
