What is Bitcoin?
Bitcoin can be broken down into two components. First, the Bitcoin network that keeps track of every transaction and address balance, and second, the currency that we use as the unit of value when we transact. We'll cover both here.
The Bitcoin Network
Bitcoin's payment network (also called the bitcoin blockchain) is what makes it possible for us to transact peer-to-peer. The network uses distributed consensus to verify and confirm transactions, and consensus is reached via a large global network of high-performance computers (called miners) running the bitcoin protocol software.
When someone sends a transaction it is broadcast instantly to the network. Miners are constantly working to confirm these individual transactions to be included in the next block of the chain. Once a new block is verified, all the transactions within it are permanently recorded on the blockchain. Rewards are paid out to miners who confirm transactions with newly minted bitcoins as a way to incentivize productivity on the network.
Each party who participates in the mining process has an identical up-to-date copy of the blockchain, which is a public ledger of all the transactions in bitcoin history. Each party's copy of the ledger is updated every time a new block is found.
The unit of value that we send and receive on the Bitcoin network is also referred to as bitcoin, or bitcoins. Bitcoin is completely digital, meaning we can't physically hold it in our hand. It's also portable, divisible, fungible, and irreversible.
For further explanation on the difference between the Bitcoin network and currency, check out this blog post.
BTC trading pairs on Blockchain Exchange: