By iTrust Capital
Bitcoin has become a household term in the past decade, but many are still uninitiated into what it really is. Here’s your chance to dive in.
What is Bitcoin?
Founded in 2009 by Satoshi Nakamoto, Bitcoin was published as a white paper, which is a concise report meant to inform the public on a complex subject.
Satoshi Nakamoto is claimed to be pseudonymous, and no one knows if it was one person or a group of people.
Alongside the white paper, Nakamoto released the first version of Bitcoin’s software, launching the network with what is known as the genesis block of bitcoin.
Now that we’ve had a brief history, let’s learn what Bitcoin really is.
According to the white paper, Bitcoin was created as a “Peer to Peer Electronic Cash System”. This essentially means: No banks or third parties are involved. The exchange of currency is instead verified by an ongoing network that documents every transaction. This network uses CPUs, or the central processing units of computers, as nodes that verify transactions.These transactions are compiled into groups known as blocks. The blocks form a chain or a historical ledger. Each node verifies the entire chain before adding a new block. Thus, the blockchain was born.
There was a movement in the 90s to create an encrypted cyber currency so as to never be manipulated. The practitioners of this movement were known as cypher-punks and they were supposedly committed to ultimate privacy through encryption. The cryptographic currencies they created, however, were prone to an issue called double-spending. Double spending meant the crypto-currencies could be spent more than once since they weren’t being properly verified or tracked.
Bitcoin was pitched as the solution to this double spending problem of these “cryptographic currencies” and to be a secure way to do commerce on the internet. Rather than being untraceable, it was the exact opposite. It was entirely tracked through the blockchain (though the buyers and sellers remained anonymous).
Because the blockchain is verified by nodes constantly, it’s very difficult to defraud the chain. Incorrect blocks will be detected and dropped fairly quickly. In theory, users’ privacy and information is better protected than in a typical system because of the lack of a third party. Anyone who wishes to attack the blockchain and defraud the system would need a considerable amount of CPU power to outpace the system of nodes, and would be better served to use that power to participate in the system. At least, that’s how the system was designed.
Crypto assets such as Bitcoin are changing the financial landscape of the world. A recent example of these changes is the Crypto IRA. At iTrustCapital, for instance, clients can open a retirement account to buy and sell crypto with the same tax advantages of a regular IRA. This type of interactivity with financial staples like IRAs is a new addition to the space that has been quickly adopted.
This content is for informational purposes only. It does not constitute legal, tax, or investment advice in any way and should be used at your own risk. We recommend seeking the advice of a qualified legal, investment, or tax professional. Cryptocurrencies are a speculative investment with risk of loss. Some taxes and conditions may apply depending on the type of retirement account. iTrust Capital, Inc. does not make any representations or warranties as to and is not responsible for the accuracy, applicability, reliability, fitness, suitability, or completeness of the content. iTrust Capital, Inc. disclaims any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of the content, which is provided as is, without warranties.
iTrustCapital, Inc. is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrust Capital, Inc. is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
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