Bitcoin could easily be termed as the cryptocurrency that has turned out to be fascinating for investors and traders since its inception. Bitcoin is the first-ever cryptocurrency that has been adopted widely across the globe.
What is Bitcoin?
Bitcoin is an open-source, decentralised digital currency that uses peer-to-peer technology to operate independently without interference from governments or banks. The Bitcoin network manages fast transactions throughout the world without any intermediaries.
Bitcoin was invented in 2008 when a person or group of persons named Satoshi Nakamoto outlined the concept. It was finally launched in 2009; Bitcoin became the most prominent cryptocurrency globally in terms of market capitalization.
The technology of Bitcoin is quite simple – it is digital money that manages peer-to-peer transactions worldwide over the Internet. Bitcoin is not only the first-ever cryptocurrency, but it is also the most efficient and popular one amongst over 16000 cryptocurrencies that we know today.
Moreover, this open-source and decentralised currency is relatively easy to access, allowing developers to verify how Bitcoin works by studying its source code at any time. Since it is controlled or owned by no third party, anyone can invest in it.
Bitcoin cryptocurrency also offers unique properties that you won’t find in any payment systems that existed before. It has become so popular that you can see a post about it on various social media channels every 3 seconds!
How Bitcoin Works?
Bitcoin uses cryptography, which converts ordinary text into incomprehensible codes and vice versa for storing and securing data. Since it exists in digital forms, physical bitcoins don’t exist. Bitcoin is abbreviated as BTC at the time of trading.
A Bitcoin is nothing but a balance stored on a public ledger that allows easy and transparent access to everyone. But don’t worry; each user’s crypto information is encrypted and secured through unique codes and unintelligible texts.
What is Bitcoin Mining and How Does it Work?
Every Bitcoin transaction is verified using massive computing power through ‘mining.’ Unlike fiat currencies, Bitcoin or any other cryptocurrency is created, distributed, mined, or traded, and securely stirred using a decentralised public ledger system, commonly known as the blockchain.
Bitcoin mining refers to a process that allows one to create new bitcoins by solving certain puzzles. Bitcoin mining involves various computing systems that have specialised chips designed to solve complex mathematical puzzles.
The first person who can solve the puzzle will be awarded bitcoin. The entire transaction over the cryptocurrency’s network is also confirmed through the mining process, thus making the payment processor reliable and safe. It’s essential to mine bitcoins as it helps maintain the transaction ledger or the blockchain on which Bitcoin is based.
Is Bitcoin Safe?
Before discussing the safety of this digital asset, or any other cryptocurrency for that matter, it’s highly volatile, so much so that it makes significant headlines in various media channels. So, if you are a beginner willing to invest in Bitcoin, make sure that you are ready to take the risks. Also, if you are ready to make an investment, it’s crucial that you use a secured crypto payment processor to initiate the transactions.
That being said, Bitcoin is relatively safe and secure, and considering the current crypto market trends, it is one of the most traded cryptocurrencies in the world. However, you may need to consider some risks involved while trading in this popular digital currency.
Bitcoin is not only volatile, but it also relies on passwords. You also need to consider that Bitcoin wallets are not immune to hackers. However, the theft rates are relatively low compared to other forms of digital money.
Besides, Bitcoin comes with low processing fees compared to the traditional online payment processors and is even lower than the currencies issued by the governments. It’s all possible because of the decentralised nature of its authority.
Bitcoin is considered a type of cryptocurrency as it uses cryptography technology to ensure the highest safety and security. Bitcoin mining is also legal across many developed and developing countries, including the US, the UK, Canada, Egypt, Algeria, China, Georgia, Russia, Venezuela, Iceland, Morocco, and others.
Even though Bitcoin has yet to become a legal tender in many countries, it has become so popular that it gave birth to thousands of other cryptocurrencies, collectively known as altcoins.
Some people consider Bitcoin mining as not so eco-friendly. Indeed, only around 55-65% of the Bitcoin mining process uses our renewable energy sources. However, soon we can expect a more environment-friendly Bitcoin mining technique that uses low energy. The excellent news is Ethereum, Bitcoin’s sister is gradually adopting a more sustainable mining technique.
Before trading in any kind of cryptocurrency, especially when you are a newbie in investing, do thorough market research before making any decisions. While Bitcoin is relatively safe and trustworthy, allowing you to multiply your money enormously, you can also end up losing your hard-earned fortune if you don’t do your homework well!
The post What is Bitcoin? appeared first on InsightsSuccess.