Bitcoin (BTC) is the biggest and most popular cryptocurrency in the world today. It is not physical, like coins or bills, but is stored in digital form on computers. Unlike the currencies of different countries, it is not managed by a person or an organization.
In 2009, an anonymous person called Satoshi Nakamoto created the world’s first cryptocurrency, Bitcoin. To this date, no one knows whether Nakamoto is a person or an entity.
What is Bitcoin?
Bitcoin is a virtual currency that is used to send and receive payments on the internet. It allows for direct peer-to-peer transactions. Here’s the kicker: you could be sitting at the North Pole and sending Bitcoin to someone at the South Pole without needing a third party for the exchange.
It is different from famous payment apps like Google Pay or Venmo, where you transfer money after the approval of your bank. Bitcoin is decentralized. It is not controlled by any institution or individual.
How does Bitcoin work?
Have you heard of blockchain technology? No? Then allow us to explain.
A blockchain is a digital ledger distributed across multiple computers. It is the heart of Bitcoin.
It is a chain of blocks that contain a list of transactions. When transactions take place, multiple systems confirm and record the information on this joint platform.
To check whether the information put in the ledger is accurate, people called miners are put to work. When the verification is complete and the transaction is successful, bitcoin is mined.
This freshly mined bitcoin is given to the miner who authenticated the transaction. The miners can choose to use or sell the Bitcoin as they please.
Bitcoin Mining
Just like dollar bills are printed, bitcoin is mined. During the initial years, it was mined on our daily computers and laptops. However, as the popularity of cryptocurrency grew, the process became more complex.
To earn a Bitcoin, you will need to solve a math problem on your computer. You will have to come up with a cryptographic solution that fulfills the prerequisite criteria to authenticate data on a block.
Solving this puzzle, which is called a hash, on your own is not at all possible, since there are millions of miners working on the same thing. The miner who arrives at a solution first is awarded the mined bitcoin.
This process of mining will continue until there are 21 million bitcoins. When the limit is reached, no new bitcoin can be mined and the miners will be awarded monetary compensation by other users. According to Coinbase, there are over 3 million bitcoins left to be mined, and it will take more than a century to reach the number of 21 million.
What is Bitcoin worth?
In 2009, when Nakamoto minted Bitcoin, it was worthless. However, over the years, the world’s first cryptocurrency has experienced a meteoric rise in value. A single bitcoin is worth around $41,825 today. You can check its real-time value on CoinDesk.
How do I buy Bitcoin?
If you are looking to invest in the crypto market, then buying Bitcoin is the best option. It is the world’s most popular cryptocurrency, with a market cap of over $800 billion.
You can use an online exchange platform like Coinbase to buy it. After registering yourself, you can buy, sell, send, receive, and store BTC easily.
When you purchase bitcoins using these exchanges, it gives you public and private keys. A public key is similar to your email address. It keeps your Bitcoin safe and lets other people send you Bitcoin. The private key is similar to a password that lets you enter and use your Bitcoin.
What Can Bitcoin Be Used For?
You can use Bitcoin to purchase products and services, similar to physical money. When you pay for something using BTC, you just need to enter the receiver’s public key and the amount in your virtual wallet. Your transaction will be carried out smoothly.
When you use Bitcoin to pay, you do not have to give out much personal information. If you buy something that needs to be physically mailed to you, then only you need to share your address and name.
You can do a lot of other things with BTC. You can exchange it for money through a trading platform or use a Bitcoin cash machine. You also can buy things on internet shops, if you have a Bitcoin debit card.
Also, you can choose to keep a few or all of your bitcoins for investing and saving as a long-term asset.
The Bottom Line
Bitcoin is the world’s first open payment network and cryptocurrency. It has gained much popularity and success since 2009. Many digital currencies have emerged to compete with Bitcoin, but none of them have gotten as popular and successful as the original one.
The crypto market is volatile and keeps fluctuating every hour. These investments come with a great risk of monetary loss. So when you consider putting money into Bitcoin, take your time to thoughtfully decide if it’s the right choice for your investment. You should know the dangers before you jump in.
Take your time, learn about the market, or get financial advice from an expert if you want to invest in this.
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FAQs
Bitcoin is the most successful and popular cryptocurrency in the world. Its market capitalization is well over $800 billion. You can invest in BTC if you are adept in crypto and trading. However, please note that this market is volatile and you may suffer monetary loss if you are not well-informed.
According to experts in the industry, it is predicted that 1 BTC will be worth $120,000 or more by 2030. IN 2023, Bitcoin crossed the $42k mark.
Someone named Satoshi Nakamoto created and minted the first Bitcoin in 2009. It is still unknown as to whether Nakomoto is an individual or a group.
Choose an online exchange platform to buy Bitcoin from. Make your payment and place your order. Once the payment is complete, you will receive your bitcoin in your virtual wallet. You will also be provided with a public and private key.
