Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The currency began use in 2009 when its implementation was released as open-source software.
Bitcoin transactions are more secure than traditional financial transactions because they do not rely on trust in a specific counterparty. The blockchain ledger is transparent, meaning anyone can view the transaction history. However, the identities of the parties involved in each transaction are encrypted, providing a level of privacy and anonymity.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services, but the exchange rate is highly volatile. Bitcoin has faced criticism for its association with illegal transactions, its high electricity consumption, and potential for facilitating money laundering and tax evasion. Despite this, it has also been lauded for its potential to bypass traditional financial intermediaries, and it has spawned a multitude of other cryptocurrencies and blockchain-based technologies.
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