Bitcoin is a digital currency that can be traded on open exchanges or buy goods online. It’s the first decentralized currency, so there’s no centralized authority like a central bank controlling bitcoin. Bitcoin can also be mined, but it’s not easy – you’ll need expensive deep-learning machines and lots of electricity. Although bitcoin has had some trouble recently with marketwide crashes that terrorized holders of the currency, this is just part of the boom-bust cycle that has been seen in other new technologies from undervalued stocks to tulips in 17th century Amsterdam.
- What is cryptocurrency?
Cryptocurrency is a subset of digital currency and could be purchased on a platform, Bitcoin, Dogecoin, Litecoin, Ripple, and Potocoin are the most popular.
- What can you buy with cryptocurrency?
Online merchants like Amazon, Overstock, and Expedia accept bitcoin as a payment method. In addition, Bitcoin ATMs have begun to appear in some cities worldwide, where people can exchange cash for bitcoin or send bitcoins to others via email or text message.
- Who invented it?
Bitcoin was introduced in 2008 by someone (or a group of people) under the pseudonym Satoshi Nakamoto, who also invented PGP (Pretty Good Privacy). Its inventor has never been publicly identified though many have tried, including a British entrepreneur, a Florida programmer, and a California engineer.
- How is bitcoin different from regular money?
To start with, bitcoin isn’t legal tender – it’s not convertible into US dollars or any other government-backed currency. It’s also not backed by any central bank or institution, and its value is based on what people are willing to buy and sell it for. Like cash, it’s also anonymous and can be used to purchase illegal goods on the Dark Web.
- Who is using it?
Bitcoin was initially the territory of computer geeks and tech enthusiasts, but now it’s gaining traction with a mainstream audience. In January 2014, Overstock.com became the first significant bitcoin-accepting retailer. Other big-name brands like Subway and Microsoft soon followed suit, as did some retailers in Australia and South America. Russia has also taken a liking to it, becoming so enamoured with bitcoin that some retailers in Moscow accept only electronic payments – and won’t take paper money anymore.
- What is its future?
In 2012, bitcoin became the first decentralized digital currency to be used in a real-world transaction as two pizzas were purchased for 10,000 bitcoins. In early 2017, the value of one Bitcoin exceeded $1,000 – up from just $100 a year prior – as investors became more confident in this new form of currency.
- Is it safe?
Security is not one of bitcoin’s strong points. Hackers have stolen billions of dollars’ worth of bitcoins from online exchanges, and many more millions of bitcoins were taken from individual users.
- How does it work?
Bitcoin is the first of a growing money category known as cryptocurrency. Cryptocurrency isn’t tangible like a dollar or a pound; it’s made up of digital data stored in a blockchain that’s where the name comes from. Each unit has its unique fingerprint or code called its blockchain identity. There are many different blockchains – bitcoin and Ethereum are two popular ones, but there are many more out there, and each one has its own unique blockchain identity.
- Who controls it?
A single entity or person doesn’t control Bitcoin – even the inventor, who goes by the pseudonym Satoshi Nakamoto, doesn’t control it. Instead, bitcoin is run by a decentralized network of computers worldwide that work together to keep track of transactions and add new bitcoins to the network (this process is known as mining). You can join many mining pools if you have access to cheap electricity and the right equipment.
- What’s its history?
Bitcoin was invented in October 2008 after a white paper published by someone using the name Satoshi Nakamoto described how it worked. Early bitcoin users first bought and sold bitcoins through sites, which helped increase its popularity. However, you can only buy bitcoins directly from other people using bitcoin exchanges.
The Final Lines
Bitcoin is considered a new phenomenon. It is still evolving; there are unpredictable events that even the most experienced investors need to watch on bitcoin smarter .
