27 Friday November 2020
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27 Friday November 2020
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Bitcoin BTC

What Is Bitcoin?

If you are new to Bitcoin BTC, you either heard of it as a new way to send and receive money – or know it as the digital currency which skyrocketed in price in 2017. The cryptocurrency was priced at $900 in January 2017 and peaked at $20,000 in December 2017 (11 months after that) – to later hover around $5,000.

This is what made it one of the hottest topics over the past few years, mostly because of the powerful and innovative technology that it presents. On top of that, Bitcoin BTC is a form of a currency known as digital currency (cryptocurrency) represented through a token which shows ownership of a digital concept.

Basically, the benchmark BTC is an entire system that enables payments to be sent between users without them passing through a central authority such as a bank or a payment gateway. Hence, the payments are created, transferred and held electronically. Unlike fiat money (dollars, euros, francs), Bitcoins are not printed – they are instead produced by computers all around the world using free software.

Who Created Bitcoin And Why?

The cryptocurrency was created by a person who wanted to stay anonymous, which is why he only got known by his alias – Satoshi Nakamoto. To this day, no one knows who this guy is. However, it was designed in 2008 as an electronic payment system that is based on mathematical proof.

The main idea behind the conceptualization of the digital asset was to produce a means of exchange that is independent of any central authority and one that could be transferred electronically in a secure, verifiable and immutable way.

When it comes to the motive behind creating Bitcoin BTC, it is simple…Bitcoins can be used to pay for the same things that can be paid with money, if both parties are willing. In this sense, it is much like conventional money with the only difference that it is traded digitally.

Main Features Of Bitcoin

There are many features that make Bitcoin ideal as a digital currency. The three main ones include:

  1. Decentralization – This is probably the most important thing about Bitcoin. In other words, it means that no single institution controls the Bitcoin network – but it is instead maintained by a group of volunteer coders. Without any authority and with a completely open network of dedicated computers spread around the world, Bitcoin solves the “double spending problem” and gives no control to authorities like banks in the traditional currency system.
  2. Limited Supply – Bitcoin’s supply is very much different to fiat currencies – it is limited. This way, Bitcoin cannot be manipulated and holders of the currency are the ones who control it. A small number of new Bitcoins come out every hour, and will do so until a maximum of 21 million has been reached.
  3. Pseudonymity – Senders of Bitcoins have complete anonymity over the way they spend their money. Since there is no central “validator” controlling things, users do not need to identify themselves when sending Bitcoin to another user.

Also, there is the immutability, divisibility, freedom of spending and many other things that make Bitcoin special.

How Are Bitcoins Created?

Unlike fiat (paper) money which is printed, Bitcoins are “mined” using computers which solve complex math puzzles. At the time of creation, Satoshi Nakamoto (founder of Bitcoin) decided that there can only be 21 million Bitcoins.

It is not easy to create a Bitcoin and requires a lot of computing power and electricity. However, miners are incentivized to do so because if they solve a mathematical puzzle the forms a new Bitcoin BTC, they get rewarded with 12.5 Bitcoins – and that is a lot of money.

How And Where To Buy Bitcoin BTC?

Bitcoin can be bought from cryptocurrency exchanges which are the best places to buy or sell Bitcoins with different currencies. Some of the most reputable and trusted Bitcoin exchanges are Binance, Bittrex, Poloniex, Kraken, Bitstamp and Gemini.

Once you purchase your Bitcoins on an exchange, you need to store them in a “digital wallet”. This is basically a collection of addresses and keys that unlock the funds within your Bitcoin. Therefore, a digital wallet is just like a virtual bank account which allows users to send or receive Bitcoins.

There are many alternative uses for Bitcoin BTC wallets – you can use yours to pay for goods or save money to finance something in the future (for example, buying a new car). There are different types of wallets which users can have – and all of them come with different security levels.

There are hardware wallets which are basically something like USB devices made for storing your Bitcoin BTC – and desktop wallets which enable software to be downloaded and installed on a laptop where users can store their coins and have complete control over them.

How To Spend Bitcoin BTC?

 

When setting up a Bitcoin wallet, you will also create a public Bitcoin BTC address which will look something like this – 1HF4LCfpkM9V2vBxvCKV5oFSQs.

A Bitcoin address is similar to an email or physical address – and is usually the only information that you need for someone to pay you with Bitcoin BTC. It is also the only public facing data that you will share as part of a transaction.

So, to spend Bitcoin BTC, you simply share your BTC address for the recipient to decode using their wallet. This is when a transaction is recorded on the blockchain for all other Bitcoin users to see

 

 What Is The Benefit Of Bitcoin BTC?

The main benefit of Bitcoin as an investment tool is the fact that its value may rise in the future. However, this also means that BTC is volatile and that the price of the cryptocurrency is highly speculative with a lot of risks involved, mainly from the fact that the space is unregulated.

Therefore, if you are looking to invest in Bitcoin, you should know that it is part of a relatively new and promising technology that is adopted in many industries – but also an industry that carries a lot of risk and in which you can lose all of your investments.

The main benefit of using Bitcoins, however, lies in their transaction. BTC can be transferred anywhere around the world and withdrawn from any exchange, no matter where the individual is.

If you want to read more about Bitcoins and check the latest news related to the most dominant cryptocurrency, visit our Bitcoin news section!

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