|What Are Bitcoins?
|With the Bitcoin price so volatile everyone is curious. Bitcoin, the category creator of blockchain technology, is the World Wide Ledger yet extremely complicated and no one definition fully encapsulates it. By analogy it is like being able to send a gold coin via email. It is a consensus network that enables a new payment system and a 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. Bitcoin was the first practical implementation and is currently the most prominent triple entry bookkeeping system in existence.
Bitcoin was the first popular cryptocoin. No one knows exactly who created it most cryptocurrencies are designed for maximum anonymity but bitcoins first appeared in 2009 from a developer supposedly named Satoshi Nakamoto. He has since disappeared and left behind a Bitcoin fortune.
Because bitcoin was the first major cryptocurrency, all digital currencies created since then are called altcoins, or alternative coins. Litecoin, peercoin, feathercoin, ethereum and hundreds of other coins are all altcoins because they are not bitcoin.
One of the advantages of bitcoin is that it can be stored offline on a persons local hardware. That process is called cold storage and it protects the currency from being taken by others. When the currency is stored on the Internet somewhere (hot storage), there is high risk of it being stolen.
On the flip side, if a person loses access to the hardware that contains the bitcoins, the currency is simply gone forever. Its estimated that as much as $30 billion in bitcoins have been lost or misplaced by miners and investors.