Bitcoin is a cryptocurrency and a digital payment system.
Bitcoin transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency.

Bitcoin is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet.
Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Blockchain how it works

*Image from © Blockgeeks 2017

Key Terms

Cryptocurrency: is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.

Blockchain: a continuously growing list of records, called blocks, which are linked and secured using cryptography.

Cryptocurrency wallet: stores the public and private keys which can be used to receive or spend the cryptocurrency. A wallet can contain multiple public and private key pairs.

The cryptocurrency itself is not in the wallet. The cryptocurrency is decentrally stored and maintained in a publicly available ledger (aka blockchain). Every piece of cryptocurrency has a private key. With the private key, it is possible to write in the public ledger. Effectively spending the associated cryptocurrency.

Bitcoin 101 November 29, 2017