Bitcoin isn’t an actual coin that you can touch. It’s cryptocurrency. Simply put, Bitcoin is a new and fabulous digital type of payment that’s produced or ‘mined’ by countless folks around the globe. With this form of digital payment, you can do your peer-to-peer transactions instantly, across the world, free or inexpensively.
Satoshi Nakamoto, software developer invented Bitcoin after many years of extensive research into cryptocurrency. The developer designed and introduced the algorithm in 2009. The true identity of Satoshi Nakamoto is a highly guarded secret.
Tangible commodities such as silver or gold don’t back this currency. Instead, it’s traded online which makes it a commodity, but not as we usually think of them. It can be traded in most major currencies like USD or Bitcoin price in GBP, or Euros. Of great importance to note is the fact that anyone can access Bitcoin makes it an open-source product. All one needs to get it is money, internet access and an email address.
Where does Bitcoin come from?
Miners of the digital currency mine it on a distributed computer network of users that run specialized software. This network not only searches for a certain data sequence but also mathematical proofs that produce a particular pattern whenever a BTC algorithm is applied. Once it achieves a match, it produces a Bitcoin. The process is energy consuming and complex.
Since its inception, only 21 million Bitcoins have been mined. Of these, roughly 11 million are presently in circulation. Math problems get progressively sophisticated to keep supply and mining operations in check. The network also authenticates all transactions via cryptography.
How does Bitcoin function?
Users of the internet transfer bits (digital assets) to one another via a network. Instead of an online bank, the currency works as a ledger that’s distributed widely through the internet. Users can purchase Bitcoin through cash or by disposing a service or product for Bitcoin. The currency’s wallet stores it.
Smartphone applications for handling mobile Bitcoin transactions are available. Today, Bitcoin exchanges have populated the internet big time.