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Bitcoin is a digital currency, a decentralized means of exchange and unit of account that was born in 2009 as an open source project called Bitcoin. Unlike most currencies in use today, Bitcoin uses no governmental regulation or centralized institution, and is issued as a limited supply.
Bitcoin is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or banks. Bitcoin allows users to send and receive funds to each other without the need for an intermediary in the form of a bank or financial institution.
As mentioned in the above picture it is not money issued by a government or a central bank but issued by individual users using computers to store and verify the transactions which is making it innovative and secure also decentralized.
Bitcoin is the first truly decentralized digital currency. Unlike traditional systems that are run by centralized institutions, bitcoin operates with no central authority: no government or central bank can freeze your account or take your property without a court order.
Bitcoin is a transnational currency system, however it is also a global phenomenon as it is accepted by many businesses in many locations in the world which is an amazing thing.
Bitcoins can be made and exchanged by users using their computers or by services which are kept completely decentralized such as Bitcoin Miners which are computers that compete to compute the cryptographic hashes (SHA-256) that serve as proof of the time spent working on the problem.
Bitcoins are issued with the click of a button, even though the computers mining for them are truly decentralized – they are part of a peer-to-peer network where every user is free to use any computer or specialized hardware, participate in the computation, and validate the proof-of-work.
Contrary to fiat currencies which are issued by governments and central banks, bitcoins are created by computer, with no central bank or government, and this is keeping it decentralized. This makes it suitable and trustworthy currency for any usage and for global adoption.
Bitcoin operates using a “client-server” architecture. This means that a Bitcoin client is running on the user’s device to give him the ability to transact with other users (servers). This client-server design is unique to the world of bitcoin, and is one of the reasons why it is so much more secure than its competitors.
Initial release of the Bitcoin Client was released in October 2008. Since then, many improvements have been made to Bitcoin. But if a user wants to send a payment to another party,