If you are hearing about cryptocurrency, chances are high you have heard about Bitcoin as well. Bitcoin is the synonym of cryptocurrency. While there is so much happening in the crypto world, beginners interested in this field wish to know more and more about different cryptocurrencies. If you don't know about Bitcoin, this article is meant for you.
Bitcoin cryptocurrency is a type of money that is virtual. In simple terms, it is a computer program that enables people to exchange the value of money directly with each other. Bitcoin is the first cryptographic commodity, a blockchain, that can be exchanged like cash protected through cryptocurrencies. Trading in Bitcoins is anonymous without any intervention from brokers and intermediaries.
It was created in 2009 by an unknown person leveraging the alias Satoshi Nakamoto. In the 90s, cypherpunk was a group that worked on security models using cryptography. The team used advanced mathematics to protect commerce, finance, and communications. The development from these cryptographic protocols led to the creation of Bitcoin, which promoted individual empowerment and distrust of the state. It was the first digital money that promoted the peer-to-peer electronic cash system.
The underlying technology of Bitcoin is blockchain, which is a type of digital ledger. Since it is digital money, you don't physically own it like cash. You own it through the means of a private key. The private key enables you to use Bitcoin, hence, make sure you store the private key in a safe place. In short, you own Bitcoin in the form of possessing a set of unique private keys.
Further, Bitcoin does not undergo printing of bills or mining of coins. It is completely autonomous. It is not under the control of any financial institution, bank, or jurisdiction. Moreover, because of its anonymity, no transaction details or user's details are recorded.
Transactions are formed through a process called Bitcoin mining. In simple terms, mining is an extraction method. In this extraction method, computational algorithms become a part of a challenging mathematical puzzle. So when one puzzle is solved, one mining block is mined and the user or programmer receives a reward. That reward is a Bitcoin.
To collect the Bitcoins users mine, the user has to create a Bitcoin account, which is somewhat like a computer email having 27-34 letters and words.
Bitcoins or other cryptocurrencies are available on marketplaces known as cryptocurrency exchanges. These exchange platforms can help you to buy and sell Bitcoins. Some popular cryptocurrency exchange platforms are Coinbase, Coinmama, etc. It is stored in a digital wallet, just like a virtual bank account.
Bitcoin is the largest cryptocurrency in the world. More and more companies are accepting Bitcoin as payment to foster a world a crypto-driven world. In the future, we might see a world where Bitcoin will be the standard digital money.
The crypto market is highly volatile. Hence, Bitcoin is subject to market turmoil. Besides that, the lack of transparency and regulation has made the legislation of countries seriously think about cryptocurrency. Further, the mining of Bitcoin has adverse environmental impacts. Hence, Tesla discontinued accepting Bitcoin as payment. Though it is still considering this decision if Bitcoin can work on sustainability concerns.
If you wish to invest in Bitcoin, read this guide to know about the crypto market.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.