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What is Bitcoin
Bitcoin is a completely decentralized digital currency. Unlike the U.S. dollar, you can't hold it in your hand or deposit it in a bank. Bitcoin runs on a peer-to-peer network where people can send and receive bitcoins without an intermediary (such as a bank, central bank, or payment institution). In fact, no centralized institution or payment system can control bitcoin.
Bitcoin is the first ever cryptocurrency, and on October 31, 2008, someone (or a group of people) published the famous Bitcoin white paper under the name "Satoshi Nakamoto".
The first line of the white paper reads, "A true peer-to-peer electronic cash should allow payments to be made directly online from the originator to the other party, without going through a third-party financial service provider.
The Bitcoin network was officially launched on January 2009, marking the beginning of the cryptocurrency revolution.
How does Bitcoin work?
Bitcoin is a truly decentralized digital currency, which makes it unlike any other asset that has come along before.
The emergence of Bitcoin revolutionized digital currencies by decentralizing the bookkeeping process. The Bitcoin network itself does not play the role of a bookkeeper; instead, it shares user account balances and transaction information in an anonymous form to users around the world. This means that anyone who wants to participate in the Bitcoin protocol can download and run the free open source software required.
Bitcoin works by ensuring that this shared ledger can be continually accumulated: new transactions are verified, recorded, and then added to the ledger in order. Adding new "blocks of information" to an already existing blockchain is the heart of blockchain technology.
How do I store Bitcoins?
You can store your bitcoins in a bitcoin wallet. Bitcoin wallets come in two forms - hot wallets and cold wallets. A hot wallet refers to wallet software that is networked, i.e., stores bitcoins online. Hot wallets are more convenient for transactions, but logically, they are more vulnerable to attacks because they are connected to the Internet.
Cold wallets are "offline" wallets. This form of offline storage is effective in preventing hackers from attacking. However, because cold wallets are expensive and require more technical knowledge to operate, they are also significantly less convenient for users. Hardware wallets and paper wallets are both cold wallets.