Definition:
Bitcoin is the first decentralized digital currency which uses encryption techniques to secure and verify transactions. Unlike conventional currency, Bitcoin does not exist in a physical form and is not regulated by governments, banks, or any other central authority. Instead, Bitcoins exist on a peer-to-peer network where transactions are secured by cryptographic functions.
Explanation:
Bitcoin was developed in early 2009 by an anonymous person (or group of persons) going by the pseudonym Satoshi Nakamoto. At the time, it was described in their whitepaper as a ‘peer-to-peer electronic cash system.’ The currency was born out of the intention to create a system that could allow individuals to exchange digital currencies without a central third-party or intermediary.
Additionally, Bitcoin is secured by a global network of individuals that govern the computing power of the network and act as the authority that enforces its credibility. Due to these defining characteristics, this cryptocurrency is described as trustless and decentralized.
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