How does Bitcoin work?
How does Bitcoin work?
Bitcoin is an electronic payment system created in 2009. It allows you to send money to anyone in the world, and you don’t need to ask anyone’s permission to create an account.
It was created as a solution to the modern financial system, where we have a small number of large banks that control who gets an account and which transactions get processed. This means the control of money is centralized, and we have to trust the banks to act responsibly.
Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. – Satoshi Nakamoto
The centralization of banking and the resulting financial crisis of 2007 inspired the development of Bitcoin. It’s a payment system, and it runs without a central point of control. It was designed anonymously by Satoshi Nakamoto, and was released in January 2009.
Anyone can run the program or use the system.
The following is a simple explanation of how it works.