It is decentralised, digital money. It was created in 2009 by Satoshi Nakamoto (real name assumed). No one controls its use. One could compare it to gold or other precious metals; however, it differs mainly because, unlike gold, for example, there will only ever be 21 million Bitcoins available. This means that no matter what happens with demand, its value won’t be diluted like many other currencies are currently doing because their printing presses are broken (that’s right – they printed too much and now everyone wants it but can’t get any). Another positive feature is that you don’t need an entire coin to make a transaction. Bitcoin is divisible to nearly 8 decimal places (0.00000001 Bitcoin), which means you can buy 1 Bitcoin or 0.1 Bitcoin or 1/10 Bitcoin, etc. Bitcoin is available to use globally and this Bitcoin Wiki page has a list of Bitcoin-accepting sites worldwide. Most traders and investors suggest the Brexit Millionaire as a secure online trading platform.
The Bitcoin online community debates the true essence of Bitcoin daily; however, Bitcoin miners (those that verify transactions to be accepted into the “blockchain” aka public ledger) and early adopters (who were there from the start) have been proven right so far as to its legitimacy as a digital currency for peer-to-peer payment systems worldwide. Even though people call one Bitcoin an ‘ITO’ these days instead of ‘BTC,’ Bitcoin has never been hacked or compromised and Bitcoin users can remain anonymous (although Bitcoin addresses and transactions between Bitcoin wallets are all made public). Bitcoin is also inflation proof which means its value will continue to grow as demand grows. Bitcoin started at $0 in 2009 and reached over $1,200 USD in 2013.
Basic Definition of Bitcoin
According to Bitcoin.org, Bitcoin is a consensus network that enables a new payment system and completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin could be used to buy things electronically in a way that it cannot be counterfeited because of its cryptographic security feature. Bitcoin is the first implementation of a concept called “crypto-currency”, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.
Bitcoin’s design allows for anonymous ownership and transfers. Bitcoin wallets can be installed on your computer, your mobile phone, or another web-enabled device. They are very safe because Bitcoin wallet files are encrypted with a private key to protect against theft or loss. You cannot spend Bitcoins without having access to both your public Bitcoin address(es) and private Bitcoin key(s). Bitcoin can be purchased through exchanges or other Bitcoin service providers. You can also accept Bitcoin as a payment for goods and services. Bitcoin mining is the process of authenticating Bitcoin transactions, providing security for the public ledger, called the blockchain. The reward for this work is transaction fees paid by those who transact using Bitcoin as well as newly created Bitcoins!
A question that boggles everyone’s minds is why it seems to be growing in price every day even though you cannot do anything with it yet besides hold onto it? Well, there are many factors including speculation but mainly because people just want to have more bitcoins at this point because they think the price will rise still further. That causes a self-fulfilling prophecy. Bitcoin critics point out that Bitcoin is not widely used at the moment due to its current limitations so there is no demand for it. But Bitcoin has had many early adopters since 2009 and many investors see Bitcoin as an alternative asset like gold (which also cannot be hacked into or counterfeited) that could protect their wealth when fiat currency crashes due to inflation. As governments continue to print more money in order to pay off their debts, Bitcoin becomes even more attractive because of its limited supply (21 million).
People can buy or sell bitcoins on exchanges like any other currency with fluctuating rates based on the market but Bitcoin exchange rates are in USD rather than Euros or Yen; however, some online stores accept Bitcoin in place of another currency.