As we move towards a digital age, we can see all aspects of society starting to embrace technology. Today, we see businesses now including bitcoin, a form of digital money, as a payment method. It is a form of cryptocurrency and is perhaps the most popular form. The popularity of Bitcoin has fueled the development of other cryptocurrencies. In fact, it is the largest cryptocurrency by market capitalization.
What is Bitcoin?
Before converting your paper bills into Bitcoin, it is worth understanding what cryptocurrencies are, how they work, and how you can better protect your investment. Bitcoin, like other cryptocurrencies, is created, distributed, stored, and traded using a decentralized ledger system called a blockchain.
Bitcoin is still relatively new and is known for having a turbulent history. Over the years, it has gone through several boom and bust cycles. Bitcoin was the first decentralized virtual currency to achieve widespread popularity and success. This has inspired other cryptocurrencies to follow suit as well.
Bitcoin and gold are often compared because they have similar characteristics. First, both have limited supply. In addition, Bitcoin can be easily divisible. One bitcoin can be easily divided into 100 million pieces.
Generally, bitcoin is controlled by a huge globally distributed network of independently operated computers. This ensures that all Bitcoins will be in order.
Features of Bitcoin
Bitcoin possesses other characteristics that make its value compared to gold.
1. It is easy to tell whether it is authentic or not. Generally, it is virtually impossible to transact using a fake Bitcoin.
2. Sending Bitcoin to anyone in the world can be done securely in minutes. It is like using encryption technology on an email.
Mining Bitcoin is possible through various hardware and software. Initially, Bitcoin mining was possible even on a personal computer. But as its popularity grew, the number of miners eventually grew, which made it impossible for just one person to solve the hash. Although mining could still be done on a personal computer, it needed newer hardware.
As the network of miners grew, so did the competition. To succeed, one must have a personal computer using Bitcoin-compatible software. Generally, one had to join a mining pool, a group of miners who combined their computational abilities to compete with larger mining farms using ASIC computers. You can check out Bitcoineer to help you get started!
Uses of a Bitcoin
Bitcoin was initially intended to be used as a peer-to-peer payment method. However, as its value and competition from other cryptocurrencies increased, Bitcoin became widespread in other cases.
As an Investment
From 2009 to 2017, the emergence of Bitcoin exchanges paved the way for its sale and purchase. In 2017, when the price of Bitcoin breached $1,000, its price in exchanges also began to increase, resulting in huge demand for the cryptocurrency.
As a Payment Method
To use Bitcoin for paying purchases or other financial transactions, you will need a cryptocurrency wallet, which holds the private keys to your Bitcoin. This serves as your password when making a transaction. Today, many establishments use Bitcoin to pay for goods and services.
The Demand for Bitcoin Will Continue to Grow
Since its launch in 2009, all indications point to the continuous utilization of Bitcoins. As businesses continue to leverage the power of Bitcoin, its value and popularity will continue to grow.