Bitcoin arouses passion, curiosity and has received more and more media attention, especially after having climbed the ranks of the best financial asset of the decade. However, whenever its price goes up, many doubts and questions arise, mainly around its origin and the energy expenditure by miners.
The Bitcoin protocol has created a unique digital asset
Before Bitcoin, there was neither a digital value to be transferred nor a digital asset to be divided into several parts. That is, if you scanned a $100 bill and wanted to transfer this bill to someone, you could only send a copy of this bill.
We are all used to smartphones and computers already. We send emails, photos, but we don’t realize that process in reality: We send a copy of the email (and not the original email), a copy of our photos (and not the original). When we click the send button on a smartphone or computer, a copy of the original will always remain on our device.
Likewise, regarding financial transactions, when we click on the send button in our internet banking accounts or at an ATM, there is always an intermediary that transfers the money from one account to another. And that’s the problem Bitcoin aims to solve — the double-spending problem.
When you click the send Bitcoin button on your cell phone, for example, you are not sending a copy, you are actually sending a digital object. Once a transaction is made in Bitcoin, it becomes irreversible and cannot be tampered with.
For that reason, it is impossible to cancel or reverse a Bitcoin transfer after it has been validated by the blockchain network because the Bitcoin protocol has solved the problem of double-spending. It made a single asset, Bitcoin, digitally unique, enabling value transactions on the internet without intermediaries (independent of a central entity).
Who issues Bitcoins?
While traditional money is issued (created) through…