Bitcoin Price, Bitcoin Value, Bitcoin News, What is Bitcoin ?
The world of finance and economics is pretty complicated as-is, and still everyday new terms crop up. Bitcoin is a word creating a lot of buzz lately. Some even believe it has the power to become the de facto currency of world. But it still has a lot way to go. Despite all this, it is still a relatively unknown term for a lot of people. So, here we will talk about What bitcoin is? Where it came from? How it works?.
What is Bitcoin?
Bitcoin is the world’s biggest cryptocurrency. It was introduced in 2009, and is the longest-standing, best-known, and most widely-traded cryptocurrency. A cryptocurrency is digital money. It’s a virtual medium of exchange, not issued by, backed by, or tied to any particular nation or government. Bitcoin was invented as a peer-to-peer system for online payments that does not require a trusted central authority (like PayPal) that verifies all of the transactions. The core innovation that makes Bitcoin special is that it uses consensus in a massive peer-to-peer network to verify transactions. This results in a system where payments are non-reversible, accounts cannot be frozen, and transaction fees are much lower.
Where it comes from?
If it’s not issued by a government, where does it come from and who keeps track of it? The acts of generating new bitcoins and of tracking Bitcoin transactions go hand in hand, and both are accomplished through a process known as “mining.” Its a relatively complex process and requires a complete new article and we will cover it in a future article. But just for starters, Bitcoins are generated everytime a computer or server runs Bitcoin software. It creates something called block chains, and so are new bitcoins created — but there’s a hard limit to how many will ever exist. The system was designed to create more bitcoins at first, then to dwindle exponentially over time.
How much is it worth? and how do you spend it?
As of this writing, 1 bitcoin = approximately USD $680.60. However, the bitcoin exchange rate is intentionally highly flexible. Bitcoin is not a physical currency. Spending takes place from one user’s virtual wallet to another user’s virtual wallet, via an exchange of public and private security keys. But to do so you have to set up your Bitcoin Wallet and acquire Bitcoins. These topic we will cover in next article.