The emergence of Bitcoin provided a ray of light to the decentralized digital currency. Bitcoin was the first cryptocurrency to be created and is currently the most valuable.
What is Bitcoin?
Bitcoin is a digital cryptocurrency that allows peer-to-peer transactions. It is decentralized form of currency which means people can make transactions without the involvement of financial institutions.
Transactions are recorded in the blockchain. No third party has control over it and anyone can become a part of that network.
Bitcoin’s supply is fixed 21 million bitcoin that cannot be inflated. It works on proof-of-work (PoW) mechanism. Proof-of-work is a process of adding new blocks to a blockchain.
Who created Bitcoin?
As Bitcoin keeps gaining momentum the question arises in our mind who created Bitcoin or how it comes into existence?
Despite a lot of digging its creator remains anonymous. However, the fact behind Bitcoin first appeared in a whitepaper in 2008 by “Satoshi Nakamoto.”
What is Bitcoin Mining
Bitcoin mining is the process of validating and recording transactions by solving complex cryptographic puzzles on Bitcoin network. It requires computational power for solving the hashes and in return, the person who mines it (miners) gets rewards(Bitcoin). Which is then released into circulation.
Bitcoin wallet is a digital wallet that allows users to hold their Bitcoin. These wallets keep users’ Bitcoin secure with unique private keys.
What makes Bitcoin a new kind of money?
- Universal- Bitcoin is global you can send it across the planet. It does not charge you a fee to access your money and does not impose limitations.
- Secure- It is based on cryptography. Bitcoin payments are more secure. There is a low risk of identity stolen.
- Openness- Every transaction on Bitcoin network is published publicly so there is no room for manipulation. It is an open source network so anyone can participate in it.
- Bitcoin transactions are cost-effective and speedy you can make transfers anytime and anywhere.
- Transactions do not contain personal information so the transactions are more private.
- As it is not authorized by any central authority being decentralized form of transaction it eliminates the third-party role.
- Price volatility is the main concern. The price may fluctuate over time.
- Blockchain technology is more secure than traditional money transfer system even though there have been a number of high-profile hacks.
- Lack of regulatory body.
Use cases of Bitcoin
- Store of value
Bitcoin is used as a store of value which means that people can use Bitcoin to store wealth that can be held over long period of time. It makes an option for those who want to protect their money.
- Digital Payments
Bitcoin allows users to securely transfer money without the need of financial institution. It eliminates fraud and double spending that can occur with online payments. Bitcoin is the best way to make transitions for those who want to make transactions without using their bank account.
- Protection against Inflation
Investing in Bitcoin you’re protection it from devaluation of local currencies that may be caused by inflation.
- Anti Corruption
Bitcoin is based on cryptographic technology and offers a powerful tool to fight against corruption. Its transactions are impossible to hide all the transactions are traceable. It can be used to detect money laundering and fraud.
Blockchain technology can be used for governance and decision-making. This would revolutionize the way government interacts with citizens.
Where can you buy Bitcoin?
You can buy Bitcoin on crypto exchanges both for fiat money and cryptocurrencies. Some of the exchanges are
Interesting fact* The first-ever Bitcoin purchase was made in 2010 when a man named Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins.
Bitcoin was the first cryptocurrency that came into existence since its introduction its popularity has surged in the crypto world. It is the largest cryptocurrency by market capitalization.No government or company controls Bitcoin. It is decentralized form of currency.