Bitcoin Description

What is it?
Bitcoin Description
Valentin Schmid

What Is It?
Bitcoin is a so-called virtual currency, only existing as encrypted pieces of data on a peer-to-peer network. More and more real-world and online merchants are accepting bitcoins as payment for goods and services, which is its predominant use.

How Is It Created?
Bitcoin is created through a process called mining. Every transaction, for example the payment of bitcoin for a service, is posted on a central ledger, the so-called blockchain. Network participants, called miners, solve mathematical problems in order to validate the transaction.

For the computer work they are doing, miners get a fixed amount of bitcoin. The total supply is limited to 21 million to be disbursed over time.

Who Started It?
The pseudonomous character Satoshi Nakamoto created the open source bitcoin protocol in 2009. Until today, nobody knows who Satoshi is in real life.

What’s Special About the Technology?
While bitcoin started out as a virtual currency, it’s the technology that is really revolutionary. The peer-to-peer decentralized decision-making process is far more efficient and fair than centralized solutions.

Valentin Schmid is a former business editor for the Epoch Times. His areas of expertise include global macroeconomic trends and financial markets, China, and Bitcoin. Before joining the paper in 2012, he worked as a portfolio manager for BNP Paribas in Amsterdam, London, Paris, and Hong Kong.
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