What is Bitcoin?
In a nutshell, Bitcoin offers a fairer financial system where everyone is equal.
At the tap of a button, you can move any amount of money, anywhere in the world—instantly, securely, and typically for micro fees. Let’s explore how it all works:
Money that you control
Bitcoin is a new type of digital money and, just like with all money, you can store it, exchange it, and make payments with it.
However, unlike with traditional (fiat) currencies where payments are controlled by central banks, Bitcoin puts you in full control of your own money.
This means you can send, receive, and store any amount of money without relying on financial intermediaries, making bank fees, identity fraud, and delays a thing of the past.
Bitcoin’s key features:
- Decentralized: nobody controls or ‘owns’ the Bitcoin network, and transactions can never be altered or censored.
- Peer-to-peer: secure payments go directly from one person or business to another, so there’s no need for any ‘trusted third party’ to process payments.
- Fixed supply: only 21 million coins will ever be created, making Bitcoin much more immune to the inflation traditional currencies are prone to.
- Low fees: it’s typically much cheaper to move money through Bitcoin’s peer-to-peer network, and transactions are also very fast.
- Global digital ledger: all Bitcoin transactions are recorded on a global public ledger called the blockchain, and anyone can view them.
Why are there different ‘types’ of Bitcoin?
At Bitcoin.com, they often use the word ‘Bitcoin’ to refer to both Bitcoin Cash (BCH) and Bitcoin (BTC) collectively. Here’s a quick explanation of why the two different digital currencies exist:
Open to all
Bitcoin is open-source software. This means anybody can propose changes to improve the Bitcoin network and, if these changes are supported by everyone upholding the network, an upgrade takes place.
If the proposed changes are not supported by the whole community, an entirely new digital currency may be created from the original coin (called a ‘hard fork’) instead. This is precisely what happened with Bitcoin.
Since the Bitcoin network is open source, it can be evolved by the community.
By original design, Bitcoin was built to be an electronic cash system. In other words, it was designed to be used for both big and small global payments—day in, day out.
However, when the original digital currency, which is now commonly called Bitcoin (BTC), became more popular in 2017, it struggled to meet the demands of a global currency.
Transactions were slow, expensive, and sometimes unreliable as the network became ever-busier, so part of the Bitcoin community decided a change was needed.
Bitcoin Cash (BCH)
To resolve the problem, they suggested that the network should undergo a change which would make it faster, cheaper, and more reliable.
In technical terms, this involved increasing the block size to 8MB; in simple terms, this means the number of transactions which can be processed at once increased!
However, part of the community rejected the change, leading to a hard fork taking place on August 1st, 2017. During this fork, a new type of Bitcoin called Bitcoin Cash (BCH) was created.
Today, Bitcoin Cash (BCH) can meet the demands of a global currency, which is why we support it here at Bitcoin.com. However, you’re always free to use any digital currency you choose to!