What is Bitcoin?
Bitcoin is the world’s first fully decentralized digital currency, commonly referred to as a cryptocurrency. Bitcoin was created in 2009 and since then the price of one Bitcoin has risen from a few pennies, to several thousand dollars! That’s enough info to make you really want to know, “What is Bitcoin?”
So how does it work and why are people so excited about it?
Bitcoin is digital currency that is sent person to person over the internet without the need for a bank. This takes the power away from big financial institutions and puts it in the hands of people.
You can purchase Bitcoin from several different exchanges or brokers, exchanging your dollars, euros or other fiat currency for Bitcoin.You can then store your Bitcoin in a digital wallet on your computer or smartphone.
From your wallet, you can easily send Bitcoin to anyone across the globe.Originally, Bitcoin was designed for fast and cheap transactions. However, as demand has grown for the cryptocurrency, transactions have become slower and more expensive. Developers are currently working to implement changes that will make the network faster and more efficient.
What is Bitcoin’s buying capability?
You can use your Bitcoin to purchase goods or services from thousands of stores, with more being added every day. Overstock.com takes Bitcoin and Amazon is preparing to take Bitcoin. In Japan, there are 260,000 stores preparing to accept Bitcoin for payment. As the technology continues to gain traction, more and more retailers will be switching to cryptocurrency.
Do I have to buy a whole Bitcoin?
A Bitcoin can be divided down to 8 decimal places (0.00000001 BTC).This allows you to buy a whole Bitcoin or fractions of a Bitcoin. You can buy, send or receive any amount, whether it is $10 worth of Bitcoin or $10,000. Investors who want to get started in Bitcoin can purchase any amount that fits their budget.
How does all of this work?
The Bitcoin network is maintained and secured by individuals called miners. Miners verify transactions and generate what’s called a block reward. This block reward contains newly created Bitcoin. Once the transactions are verified, they are recorded in a distributed, public, ledger. This technology is called blockchain.
Bitcoins are created at a predictable and limited rate.This means that over time, the block reward decreases and the difficulty of mining increases. The total supply of Bitcoin is capped at 21 million coins. Bitcoin is finite, and for that reason many analysts believe it is likely its value will continue to rise.
Bitcoin is open source and transparent, meaning anyone can look at the code and it is not controlled by a single person, organization or government. Bitcoin is democratizing money just as the internet democratized information!
Bitcoin may have been the first cryptocurrency, but it isn’t the only cryptocurrency. In fact, Bitcoin has started a technological revolution that is taking the world by storm!