The first time I heard the word 'bitcoin' was in 2019, heard it is a digital currency that is of more value than the normal fiat money. Truth be told, I thought it was one of those Ponzi schemes so I blocked my ears because, once bitten, twice shy. In 2020, I got a better knowledge about the bitcoin concept when a mass protest against police brutality and bad governance took place in Nigeria, and people had to resort to donating through bitcoin because their bank account was flagged and most of them were tracked through their details in the bank and arrested. Recently, I got to learn that bitcoin is more than just being a "digital money", and I would love to share this knowledge with people like me who believe(d) bitcoin is just another Ponzi scheme or a digital currency.
Bitcoin is a peer to peer network system, that allows users to make transactions without the permission of a centralized body like the bank or government. We are all familiar with the concept of the bank, having a bank account, sending money to other people through the account, where the bank serves as the middleman and help to validate the transaction and settle disputes that may occur. With Bitcoin, there is no centralized body like the bank, no authority to dictate transaction validation, or even track your money to monitor the money you sent and that received.
The Bitcoin Network
As stated earlier, Bitcoin is structured as a peer to peer network system, peer-to-peer here means that all computers participating in the network are equal, there is no server or client, no special computer that gives information to others, and no hierarchy (no levels to it). There are many underlying concepts that make up the Bitcoin network, they include;
Node
A Bitcoin node is like the central nervous system of the Bitcoin network. All computers participating in the network are called nodes, they help to hold and distribute copies of the Bitcoin blockchain, they ensure the network is running by validating and verifying bitcoin transactions, and they may also include wallets to help store the bitcoin currency.
Nodes range from computers to phones to laptops to routers, etc. They come in different forms and sizes, because of this and the blockchain size, their functionalities are limited (You do not expect a phone to do the same work as a computer, the computer has more functionality), regardless of the size, all nodes are equal even though they take on different roles depending on the functionality they can handle.
The type of nodes includes full nodes, lightweight/SPV nodes, and mining nodes.
Blockchain
Blockchain is the underlying technology of the Bitcoin network, it is a distributed ledger in which all bitcoin transactions are recorded because it is public, therefore anyone can download it. There is no central authority to keep tabs on all Bitcoin transactions, so the participants themselves do so by creating and verifying "blocks" of transaction data.
A block is the smallest unit of a blockchain, and it is a container that holds all the transaction details, transactions are recorded with an immutable cryptographic signature called a hash. This makes it difficult to alter or modify any transaction added to the blockchain as it would be immediately apparent it had been tampered with. To modify a transaction, you will have to change every block in the chain, across all of the distributed versions of the chain (The good thing is there is no centralized body, so you don't know how many participants are on the network).
Mining
I am sure you are already wondering, "how can you tell a valid transaction?", if there is no central body, anybody can claim ownership of a bitcoin, and any shady transaction can be added to the blockchain. To ensure that the blockchain is void of shady transactions and attacks that will corrupt the network, Bitcoin uses a proof of work system, this work is called the Bitcoin Mining.
Bitcoin mining is the process by which Bitcoin transactions are validated digitally on the Bitcoin network and added to the blockchain ledger. It is done by solving complex cryptographic hash puzzles to verify blocks of transactions that are updated on the decentralized blockchain ledger. Solving these puzzles requires powerful computing power and sophisticated equipment. In return, miners are rewarded with Bitcoin, which is then released into circulation hence the name Bitcoin mining.
Bitcoin's software adjusts the difficulty miners face in order to limit the network to a new 1-megabyte block of transactions every 10 minutes. That way, the volume of transactions is digestible. The network has time to vet the new block and the ledger that precedes it, and everyone can reach a consensus about the status quo.
Why Bitcoin?
Bitcoin was introduced in 2008 by Satoshi Nakomoto (an unknown human or robot), it was designed to solve the problem of a body or intermediary having so much power and having to put too much trust in a third party or intermediary. Bitcoin uses a specific type of database called Blockchain, unlike a normal database, the blockchain is different, as there is no one in charge, it is run by the people who use it by reaching a consensus on what validates a transaction. I believe why there is so much buzz about bitcoin is the transparency, you see all transactions, you know the consensus guiding validation of transactions, nobody dictates the rule, we all have to agree.
Bitcoin is cryptographically secure, this guarantees the privacy of the sender and receiver while still making it possible for anyone to view transactions. Compared to traditional fiat currencies, assets can be transferred faster on the bitcoin network. It also has lower transaction fees, because it’s decentralized and there are no intermediaries.
The privacy bitcoin provides cannot be overemphasized, while it might be argued that it can serve as a front for criminal activity since transactions can't be tracked using participant's details, the truth is criminal activity has been taking place way before bitcoin emerged, bitcoin won't stop it, neither will it aggravate it. It is just a decentralised system that takes power away from authority to the people. Everyone has a right to how they spend their money and Bitcoin just help to ensure that.
This post gives a basic description of the Bitcoin network, it is more technical and interesting to learn than this, you can reach out to help with resources to get started with understanding the Bitcoin network. I hope the next time you hear the word "bitcoin", you think of it beyond the currency and remember, Bitcoin is for everybody.