WHAT IS BITCOIN?
As its inventor Satoshi Nakamoto described it, bitcoin is a peer-to-peer electronic cash system. It is a decentralized digital currency without a central administrator, bank or controlling authority. It can be sent or received on an international peer-to-peer network without the need for middlemen or intermediaries.
It is denoted by the symbol BTC, and the bitcoin value is the highest of any cryptocurrency in the world. However, it’s important to understand bitcoin isn’t just a form of currency; it is a payment system that allows users to send verifiable payments to each other electronically and in a secure manner, without the presence of a central authority. All transactions are stored in a public ledger called the “blockchain” which contains all transactions ever processed on the bitcoin network.
Released as open-source software in 2009, Bitcoin is often credited as the world’s first cryptocurrency and is best defined as a digital currency that only exists electronically. Bitcoin is decentralized, meaning it doesn’t have a central issuing authority or political institution that controls the amount of bitcoin in circulation. But the Bitcoin platform is far from anarchy.
HOW DOES BITCOIN WORK?
In order to understand what bitcoin really is, it’s necessary to understand how it really works, and in order to understand that, let’s take a look at the characteristics of the popular cryptocurrency that differentiates it from digital versions of the traditional forms of currency (dollars, pounds etc.) or “fiat currency:”
Bitcoin's Special Characteristics
No one controls the bitcoin network. The network is maintained by a group of coders and run by a dedicated and distributed open-network of computers that spans the entire world. Banks and financial institutions are responsible for maintaining the integrity of transactions when it comes to digital fiat currencies, but in the case of bitcoins, the distributed open-network does that job.
Electronic versions of fiat currencies are the same as the physical ones: they have an unlimited supply. Banks control the influx of these currencies and their values relative to other currencies. Bitcoin is completely different: only 21 million bitcoins can ever be created. The algorithm that runs the cryptocurrency issues a small amount of new bitcoins every hour, and will continue to do so at diminishing rates until the 21 million cap is reached.
The smallest unit of a dollar is a cent, which is 1/100th of a dollar. Do you know the smallest unit of a bitcoin? It’s called a Satoshi, and its value is 0.00000001 BTC or 1/100000000th of a bitcoin. This opens up opportunities for micro-transactions that are not possible with electronic fiat currencies like the dollar.
WHAT IS A BITCOIN MINER?
As much as cryptocurrency mining was originally designed to be something everyone could do with their home computer, those days are long gone. Today, whether you’re mining Bitcoin, Litecoin, DASH, or a host of other cryptocurrencies — the most effective way to do so is with a piece of hardware known as an ASIC miner.
It’s not a desktop PC or a dedicated graphics card mining rig — it’s something else. Application specific integrated circuits, or ASICs, are chips that are designed with a singular purpose, ranging from audio processing to managing a cellphone call. In the case of cryptocurrency mining though, these chips are built into specifically-designed motherboards and power supplies, constructed into a single unit. It’s not just a purpose built machine though, it’s purposely designed and developed hardware right down to the chip level.
HOW TO GET STARTED WITH BITCOIN?
Mining isn’t the only way to obtain bitcoins though; there are several ways to get started with BTC. The most common way is to just pick the right time and buy Bitcoin from a reputed cryptocurrency exchange. You need to equip yourself with a bitcoin wallet where you can store these bitcoins.
If you are apprehensive about buying BTC, and you’d like to test out the waters first, you can just sign up to a website that gives away free bitcoin, also known as a bitcoin faucet. This is a good way to learn more about the biggest and oldest cryptocurrency in the world.
WHAT IS BITCOIN WORTH?
The bitcoin price experienced volatile up-and-down movement from 2009 to 2017, when the bitcoin value rose to a massive $20,000 at the end of 2017, before 2018 saw it plummet to lower than $4,000. Now, experts predict that the price of bitcoin could touch as high as $50,000 by the end of 2020. Well, we can just wait and watch. If you’d like to know what is a bitcoin worth in your country’s currency, here’s a bitcoin price calculator to help you out.