Bitcoin Definition

What is Bitcoin？

Bitcoin is a decentralized digital currency created in January 2009. It follows the idea presented in the white paper by the mysterious and pseudonym Satoshi Nakamoto 12. The identity of the person who developed the technology is still a mystery. Bitcoin promises lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, is operated by decentralized authorities.

Bitcoin is known as a type of cryptocurrency because it uses encryption to keep it secure. There is no physical Bitcoin, just the balance held in a public ledger that is transparently accessible to everyone (although all records are encrypted). All Bitcoin transactions are validated by a huge amount of computing power through a process called “mining”. Bitcoin is not issued or endorsed by banks or governments, nor is it a single Bitcoin of commercial value. Although not legal tender in most parts of the world, Bitcoin is very popular and has triggered the launch of hundreds of other cryptocurrencies, collectively known as an altcoin. Bitcoin is commonly abbreviated as BTC when traded.

Bitcoin mining

Bitcoin mining is the process by which Bitcoin circulates. Generally, mining requires solving computationally difficult puzzles to discover a new block, which is added to the blockchain.

A variety of hardware can be used to mine Bitcoin. However, some yield higher rewards than others. Certain computer chips, called application-specific integrated circuits (ASICs), and more advanced processing units, such as graphic processing units (GPUs), can achieve more rewards. These elaborate mining processors are known as “mining rigs.”

One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi.6 If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places.

PeertoPeer Technology

Bitcoin is one of the first digital currencies to use peer-to-peer (P2P) technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network—Bitcoin “miners”—are in charge of processing the transactions on the blockchain and are motivated by rewards (the release of new Bitcoin) and transaction fees paid in Bitcoin.

How to Buy Bitcoin

Many Bitcoin supporters believe that digital currency is the future. Many individuals who endorse Bitcoin believe it facilitates a much faster, low-fee payment system for transactions across the globe. Although it is not backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.

More interesting news