What is Bitcoin?
Bitcoin is a type of digital currency.
While this definition of Bitcoin is technically correct, it’s also a pretty incomplete one.
At its most basic level Bitcoin is a computer protocol.
If you’re not familiar with computer protocols they’re basically sets of rules that govern how information is transferred between computers.
This protocol allows independent computers across the Internet to link together to form a decentralized network.
What’s unique about the Bitcoin protocol is that decades of research into cryptography have culminated in a way to send digital information in a manner that is safer and more secure than ever before.
We’ll explore the technical components of how Bitcoin accomplishes this a little later in a different blog post.
But for now we want to paint a clearer picture of what this decentralized network does and why it’s important.
The most practical way to think about Bitcoin is to envision it as an Internet-wide distributed ledger.
Instead of one ledger held by an accountant, it’s a shared ledger held by everyone.
This is triple-entry accounting.
This is what makes Bitcoin (and other blockchain tech) valuable.