Bitcoin is a consensus network that enabled a new payment system and a digital currency, which was created in 2009. It is the first decentralized peer-to-peer payment network powered by users and has no central authority or middlemen. From a user perspective, Bitcoin is like cash but can only be used online.
Bitcoin operates via a mobile app or computer program that gives users their own Bitcoin wallet and allows them to send and receive bitcoins.
Behind the scenes, the Bitcoin network shares a public ledger known as the Blockchain. This ledger contains every transaction ever processed, allowing a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, giving all users full control over sending bitcoins from their own Bitcoin addresses. Anyone can process transactions using the computing power of specialist hardware and earn a reward in bitcoins for this service. This is often called mining.