In short, Bitcoin is a digital form of money that runs on a distributed network of computers (nodes
). In a broader sense, though, many people often use the word Bitcoin to refer to a few different things: a digital currency, a decentralized public ledger, a protocol, or simply the big ecosystem that encompasses all of these. However, there are some fundamental differences between these functionalities.
First, Bitcoin is the name of a peer-to-peer (P2P) digital currency, which is sometimes referred to as bitcoin (with lower “b”) or simply BTC. Bitcoin is a cryptocurrency
, which means it is a digital currency that is protected by cryptographic techniques. It was the first cryptocurrency that came into existence, and the first Bitcoin block - known as the genesis block
(or block 0) - was mined on the 3rd of January 2009.
Second, the Bitcoin decentralized public ledger is what we call blockchain
. Despite being closely related, Bitcoin and blockchain are different concepts
. The blockchain technology is what maintains the whole structure that allows Bitcoin transactions to be broadcasted and recorded in a trustless and secure way. Note that, in this context, trustless means that the blockchain system does not rely on any kind of trust to function as it is backed by computer code and mathematical algorithms. Thus, the Bitcoin blockchain works as a decentralized digital ledger that publicly lists all confirmed BTC transactions.
Lastly, the term Bitcoin was also used to refer to the protocol that is being continually developed as an open source software
. In 2014, however, the original Bitcoin client software was officially rebranded to Bitcoin Core to avoid further misunderstanding. As an open source software, Bitcoin Core counts with numerous contributors worldwide.
Bitcoin was conceptualized by a person (or group) under the pseudonym Satoshi Nakamoto. The idea was to create a unique digital payment system that would permit borderless financial transactions to occur without the need for mediators like banks or governments. The distributed architecture provided by blockchain technology, along with the cryptographic techniques, makes Bitcoin very resistant to attacks and fraud.