Bitcoin is a cryptocurrency not issued by a central bank, traded on an open-source electronic platform (peer to peer) between private parties; it can be exchanged with goods and services, and is not guaranteed by any public authority.
According to the Bank for International Settlements (BIS) (Quarterly Review, September 2017,
“Central bank cryptocurrencies”) its main features are:
- Electronic: cryptocurrencies are stored and used in transactions digitally.
- Use of peer-to-peer (P2P) transactions: Cryptocurrencies can function like cash, in that any
two people can transact directly with each other, but they differ from the typical electronic
payments system, in which an intermediary financial institution facilitates the transaction.
- Not the liability of anyone: Cryptocurrencies are different from virtually all other paper or
electronic money, which are obligations of the issuers. Conventional currency (also called “fiat
currency”) is money issued and owed by a government or central bank, while deposits, which
are often treated as money, are issued and owed by financial institutions.
Many different platforms are available on the net to trade cryptocurrencies; their demand and supply are not centralised.