What You Need To Know About Bitcoin
Bitcoin(BTC) has made so many millionaires, so it is understandable that thousands are growing becoming more interested in investing in the market. There are authorities trying hard to clamp down on the popularity of the cryptocurrencies in general and Bitcoin in particular, but in spite of the negative efforts and negative market prediction, the use of the payment system continuous to grow.
What exactly is Bitcoin?
Before investing in Bitcoin, there is need to fully understand what it is, how it came about, and how it works. Bitcoin is a form of worldwide payment system that falls under the category of cryptocurrency. It is reputed as the first decentralized digital currency and operates on the peer-to-peer platform, allowing users to transact directly with each other without any form of central bank or sole administrator. As a digital based currency, the system verifies every transaction through what is known as cryptography. The nodes also record each transaction in a public distributed ledger called blockchain.
If the above explanation is a bit hard for you, do not fret, we will explain things in a simpler terms in the sections below.
How it came about
Bitcoin was released as an open source in January 9, 2009. Before that, the domain name ‘bitcoin.org’ was registered on 18th August, 2008. It was followed by a paper published by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System. The same author launched the coins in January. The identity of Nakamoto remains unknown but Bitcoin has traded in various denominations including satoshi, millibitcoin, and bitcoin.
How it works
Bitcoins are not like some real coins traded through computers. They are basically lines of numbered codes – more like the instructions used in computer programming. They have values, however, and can be traded. According to the publisher, Bitcoin uses ‘cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party’. This is quite similar to the way trading occurred at the initial development of the monetary system.
Bitcoin, which is a computer based currency, can be exchanged for other legal tenders like the U.S. Dollar. In spite of the reservations of many government and financial institutions, the cryptocurrency is actually a highly secured platform that can be the standard payment system for the future generation. The value of Bitcoin is also determined by market factors like demand and supply. New coins are released at the rate of 25 new coins every 10 minutes with the system programmed to ensure that there are not more than 21 million coins in existence ever.
Other things you need to know
There are other facts you should know about bitcoins and we will highlight some below:
- You can get bitcoin by swapping regular currencies for it through exchanges or accepting them as payment for goods and services
- Bitcoin wallet is the digital wallet that holds your Bitcoin and is highly secured when used appropriately
- Like regular currencies, Bitcoin price is volatile
- Bitcoin payments are irreversible unless the buyer refunds you through another payment transaction
There are several other things we can discuss about Bitcoin and it is essential that you have all the information you need before going into the world of cryptocurrency trading. This article was meant to highlight the basic information you need about the digital currency. We hope it helps you going forward.