Bitcoin is the first Blockchain based digital currency. It is a public Blockchain, and therefore, decentralized and not controlled or issued by a central authority (a country, government, company, bank, etc).
The concept for Bitcoin was released via a whitepaper, written by Satoshi Nakamoto in 2008. The whitepaper detailed a “Peer to Peer Electronic Cash System,” very similar to what Bitcoin has become today. It includes both philosophical reasons for the invention, as well as technical specifications about the cryptography, engineering, and calculations. All additions or changes to the original ledger must be confirmed by at least 51% of participants or they will be rejected and the record will not be kept.
Bitcoin was created with two purposes in mind, as 1. a store of value (i.e held as an investment) and 2. a transferable means of exchange (i.e. used to make purchases or send money to friends and family).
Unlike the US Dollar, which allows the US Federal Reserve Bank to print new supply, Bitcoin is a finite resource. There will only be a total of 21 Million Bitcoin ever created. As miners solve complex equations to unlock Bitcoin, the mining reward decreases over time. Approximately every four years, the reward decreases by half (the current reward is 12.5 Bitcoin and the original reward was 50 Bitcoin). The last Bitcoin is scheduled to be created in the year 2140.
Bitcoins are also fungible, meaning that each full Bitcoin holds the same value as any other Bitcoin. This is an important feature should Bitcoin become a meaningful means of exchange, since it will allow standard Bitcoin prices for goods and services.
Furthermore, Bitcoins are durable, they will not break down over time, as well as divisibile, as they can be bought, sold, or transferred out to eight decimal points. This means you can buy a fraction of a Bitcoin.
These characteristics together are the reason that it has been compared to Gold (or more often referred to as Digital Gold).
What is Bitcoin Cash? Is it the same at Bitcoin?
You can learn more about the difference between Bitcoin and Bitcoin Cash in our article: Inside the War for the “Real” Bitcoin.