Bitcoin: what is it?
A decentralized digital currency, bitcoin does not require a central bank or a single administrator and can be sent between users without the need for intermediaries on a peer-to-peer network. Satoshi Nakamoto a person or group of people who used the name Satoshi Nakamoto invented it in 2009. Network nodes verify transactions through cryptography and record a publicly distributed ledger in a blockchain.
How does cryptocurrency work?
Cryptocurrency is a digital or virtual form of money that utilizes cryptography for security. It isn’t managed by any central bank instead it relies on decentralized transactions which are validated and secured using cryptographic algorithms. Bitcoin was the first of this kind, created in 2009, and since then hundreds of other types have been developed, each with its own special qualities and applications.
Bitcoin vs. cryptocurrency: what’s the difference?
Cryptocurrencies are broader categories of digital or virtual currencies that use cryptography for security such as Bitcoin.
Bitcoin differs from other cryptocurrencies in the following ways:
Bitcoin is a decentralized cryptocurrency which means it operates independently of a central bank or government.
As the most dominant and widely adopted cryptocurrency, Bitcoin currently has the largest market capitalization among all cryptocurrencies.
The original purpose of Bitcoin was to create a decentralized alternative to traditional currencies. However, other cryptocurrencies have evolved for various reasons, including improving upon the limitations of existing cryptocurrencies, solving specific problems in specific industries, or creating a completely new type of currency.
Bitcoin uses a specific blockchain technology to secure transactions and prevent counterfeiting. Other cryptocurrencies may use different technologies, such as DAGs or proof of stake.
Although Bitcoin was the first and most well-known cryptocurrency there are now thousands of other cryptocurrencies with their own unique features.