Bitcoin is an experimental digital currency that allows instant payments to anyone anywhere in the world. According to wikipedia , it is a decentralized electronic currency conceived in 2009 by Satoshi Nakamoto . The name also applies to free software designed by the same author for its management and to the P2P network of which it consists.
Contrary to most currencies, Bitcoin does not depend on the trust that we can have in any central issuer, but uses free experimental software on a database distributed in several nodes of a P2P (peer-to-peer) network to register transactions and cryptographic codes that provide basic security functions that guarantee that Bitcoins can only be spent by their owner, and have only one use.
The money that governments issue has value because it is the governments themselves that declare it of legal and forced use, it is the physical manifestation of a promise and its value fluctuates according to the confidence we have in the issuer. This is why Bitcon is a decentralized currency that has found supporters in libertarians, hackers, and computer programmers.
Initiatives are emerging from governments to ban it since it leaves no paper trail of transactions so if it is used for criminal activities there is no way to trace it. But behind this problem is the real fear of governments, which is that it will become popular enough to compete with a national currency, and that banks will no longer be necessary.
In this infographic you can see how a transaction with Bitcoin works
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