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Cryptos

What Is Bitcoin?

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Bitcoin is a decentralized peer-to-peer digital currency that is powered by its users with no central authority or third party. It is a new means of exchange created by an anonymous person or group called Satoshi Nakamoto. Bitcoin pioneered the field as the first decentralized cryptocurrency back in 2009 and the decentralized control is by use of bitcoin’s distributed ledger, called the blockchain. Bitcoin is by far the most popular digital currency and it has tens of thousands of programmers and entrepreneurs around the world developing new services and apps. Like most other cryptocurrencies, bitcoin is not controlled by any single government or central bank, and no one can decide who is allowed to send or receive money. Bitcoin transactions are censorship resistant. This means that no one, including banks, or governments, can block you from sending or receiving bitcoins. The price of bitcoin skyrocketed into the thousands in 2017, and has had time to gain acceptance among both merchants and consumers. It is considered very safe compared to other digital currencies.

The program behind Bitcoin was created anonymously and introduced on the internet in 2009. Unlike traditional paper currencies, bitcoins are not managed by any central authority and they exist only in cyberspace.

Bitcoins are “mined” by powerful computers that completely solve complex math problems. The total quantity of bitcoins is capped at 21 million, and about 17 million are currently in circulation, according to blockchain.info.

How does Bitcoin work?

The Bitcoin network shares a public ledger called “blockchain”. This ledger contains every transaction ever processed, allowing a user’s computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to sending addresses, allowing all users to have full control over sending Bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in Bitcoins for this service. This is often called “mining”.

How to use Bitcoin

  • you can send and receive money anywhere in the world at any given time.
  • You don’t have to worry about bank hours, formal permission or any other limitations.
  • You can make and complete payments in bitcoin without anyone’s personal information being tied to the transactions’, therefore it also protects against identity theft.
  • The fees involved are usually also low, compared to legacy systems like Western Union.
  • Bitcoin payments are irreversible and secure, meaning that merchants don’t have to worry about the cost of fraud.
  • Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games.
  • People can send bitcoins to each other using mobile apps or their computers. It’s similar to sending cash digitally.
  • Bitcoins can be used to buy merchandise anonymously.
  • International payments are easy and cheap because bitcoins are not tied to any country or subject to regulation.
  • Small businesses like them because there are no credit card fees or charges.
  • Some people just buy bitcoins as an investment, hoping for it to go up in value.

How you can buy a Bitcoin?

A piece of digital currency is worth whatever the market decides through supply and demand for it. Many marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. The most common way to buy Bitcoin is through Bitcoin Exchanges such as Coinbase, GDAX, BitStamp or Binnance, or directly from other people via marketplaces and auction site. Purchases can be made in a variety of ways, ranging from hard cash to credit and debit cards to wire transfers, or even using other cryptocurrencies.

The digital currency has become a global phenomenon. Many upgrades in apps and protocols that will make it ready for wider use are still being developed, but the potential is huge. We’ve probably only scratched the surface of what bitcoin can do. Bitcoin is still in its infancy period with huge growth potential.

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ABOUT THE AUTHOR

Contents creator and Crypto editor on gistmelatest.com

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