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What Is Bitcoin? A Simple Investing Explainer. Bitcoin has transformed the world's financial institutions and businesses.

By Mark Sgambelluri Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Last year, we saw the biggest drop in the economy since the Great Depression, however, we started seeing the first real signs that the global financial system is migrating towards fast-growing markets for digital assets.

To truly understand crypto, we need to start from the beginning. Bitcoin was invented by a person identified only as "Satoshi Nakamoto" in an October 2008 whitepaper. Working with a crypto mailing list, Satoshi Nakamoto launched Bitcoin (an electronic version of money that verifies its transactions through cryptography) on January 3, 2009. Its unique identifier was its peer-to-peer system that couldn't be controlled by any government or person.

This wasn't the first attempt of someone trying to develop forms of electronic money, Hashcash and Digicash were two projects that preceded Bitcoin. However, they failed to solve the "double-spend" problem which means people could spend the same money twice. Bitcoin's solution was to introduce a permanent time-stamped ledger which is the blockchain. This makes every coin unique and traceable as the transaction history of each individual Bitcoin is publicly visible on the Bitcoin blockchain network.

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