Bitcoin is a decentralized digital currency, also known as a cryptocurrency, invented in 2008 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto. It was introduced in a white paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System."
Bitcoin operates on a peer-to-peer network without a central authority, meaning transactions are verified by network nodes through cryptography and recorded on a public distributed ledger called a blockchain. This ensures transparency, security, and prevents double-spending.
Key characteristics of Bitcoin include:
1. **Decentralization**: No single entity controls the Bitcoin network.
2. **Limited Supply**: There will only ever be 21 million bitcoins, making it deflationary by nature.
3. **Pseudonymity**: Bitcoin transactions do not require personal identification, though transaction history is public.
4. **Security**: Bitcoin transactions are secured through cryptographic techniques and the consensus mechanism of proof-of-work (PoW).
Bitcoin is often referred to as "digital gold" due to its store of value properties and is used both as a medium of exchange and as an investment asset.