Bitcoin as layman definition is a digital currency where Bitcoins are the units of value used in this system of digital currency.
Bitcoin is a digital currency or system originally developed by a coder and cryptography enthusiast Satoshi Nakamoto who designed the network and launched Bitcoin in June of 2009 . Satoshi left the project in late 2010 without revealing much about himself. After this nothing was heard of him, but many other developers started working on Bitcoin and the system gained importance.
Bitcoin is a mobile application or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. Bitcoins can be bought and sold online and remitted abroad with a single click on a smartphone.
Bitcoin is not controlled by a single Government or an agency but by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol .The currency also has a finite supply that’s limited by design as the algorithm that runs the Bitcoin network is designed to generate only 21 million Bitcoins ever that too by 2140. As the Bitcoin network tracks and records every Bitcoin transaction, one can actually see exactly how many Bitcoins have been created at any given moment.
Bitcoins can be bought in three ways:
First, create an account on MtGox.com (or any other Bitcoin exchange), and then wire money to that account. Once the funds arrive at the exchange and show up in your account, you can purchase Bitcoins at the current exchange rate.
Second, Bitcoin miners can try solving the mathematical puzzle governing Bitcoin and receive bitcoins as a reward.
Third, you can exchange your hard currency for bitcoins from the special online exchanges working for this purpose.
There is a growing number of businesses and individuals using Bitcoin like restaurants, apartments, law firms, and popular online services such as Namecheap, WordPress, and Reddit. While Bitcoin remains a relatively new phenomenon, it is growing fast due to the reasons:
1.There are no transaction fees to be paid to a bank or other financial intermediaries.
2. Mobile platforms offering easy buy and sell options, price updates and high levels of wallet security.
3. Bitcoin transactions are not illegal in any part of the world. (but now it is being criticized for its possibility of being used in money laundering, tax evasion and terror funding.)
4.There is an incentive system for the participants helping them earning more Bitcoins.
5. It is an anti-inflation mechanism. (According to some.)
6. Bitcoins are decentralized as these are not regulated by any government or agency.
Inspite of so many plus points there is a stigma attached to Bitcoin as many politicians and leaders around the world are against this digital currency requiring a ban due to it being linked to Silk Road, an online marketplace for illegal drugs. The main shortcoming of this system is that Bitcoin transactions are irreversible. Once a Bitcoin transaction is broadcast to the network it can’t be revoked.