Before we understand what Bitcoin is, it’s important to understand first what cryptocurrency is. Bitcoin is a cryptocurrency. A cryptocurrency is virtual or digital currency that is secured by cryptography, which is basically a fancy way of saying coding. The use of this coding makes it a secure way to hold currency, and makes it harder to counterfeit. Cryptocurrencies are built using blockchain technology, and are decentralized, meaning they are controlled by many different authorities or organizations rather than a single one. Money is centralized, cryptocurrency is decentralized.
What is Bitcoin?
Bitcoin is the most well-known out of all the cryptocurrencies, and is worth the most. At the time of writing, it is worth $13,664.29 dollars. That is the amount to buy one whole Bitcoin.
A Bitcoin is a file of code which is stored in a digital wallet app. You can download a digital wallet onto your phone or computer, and use it to store your cryptocurrencies. If you decide you want to sell or trade a full or part of a Bitcoin, you can. The blockchain stores every single transaction, creating a lost of transactions for public use. If you wanted, you would be able to trace your bitcoin back to its original owner. Because of the blockchain, people are stopped from spending coins they do not own or making copies of others cryptocurrency.
Bitcoin is so valuable because they are used as a form of money. Bitcoin’s value is a direct result of more people willing to accept the cryptocurrency as payment. Bitcoin was the first established cryptocurrency, giving it an automatic advantage to its competitors.
How Do You Buy Bitcoin?
- Bitcoins can be bought with regular money,
- You can receive Bitcoin through them being used as a currency, for example, if you sell something online, people can pay you in Bitcoin
- Bitcoins can be mined
If you want to buy Bitcoin, you will have to download a wallet that’s compatible with Bitcoin. Some popular wallets are Coinbase, Trezor, Ledger and Exodus. A wallet will protect and store your Bitcoin. You can then purchase Bitcoin on exchanges, and can usually purchase them with any kind of credit or debit card. Most credible exchanged will require you to provide personal information, such as your I.D, and other information. You then send the Bitcoin to your wallets address, and there your Bitcoin will be stored if you would like to use them in the future.
What is Bitcoin Mining?
Bitcoin is finite, meaning there are only a certain amount of Bitcoins that will ever exist in the world. The number of bitcoins that are currently in circulation is 18,533,225. In total, only 21 million Bitcoins can be mined. This leaves around 3.5 million Bitcoins which are still to be mined.
People build computers specifically with the intent to mine Bitcoin. Mining is when computers work out incredibly difficult sums or a computational puzzle. When the puzzles are solved, or, the “block” of verified transactions is completed, the computers are occasionally rewarded with a Bitcoin.