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As a person who is up to date with the advancement of technology, you must know what Bitcoin actually is. If not, fear not! We’re here to explain! ‘What is bitcoin?’ Well, to put it simply, Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency.
You must be thinking what makes it so different from other online transactions and normal currencies. The difference is that Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. However, bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money.
So basically, no one prints it. Or more like, it isn’t printed physically. What is it based on? If you come to think of it, normal currency is based usually on gold or silver, but this is not normal currency. This is Bitcoin. And so it’s based on mathematics. People around the world are using mathematical formulas to produce Bitcoins. The mathematical formula is freely available, so that anyone can check it. Bitcoin has recently been legalized in the United States.
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CHARACTERISTICS OF BITCOIN
* It’s Decentralized which means that it isn’t just controlled by one central authority. Every machine that mines bitcoin and processes transactions makes up a part of the network, and the machines work together.
* It’s easy to setup that is quite the opposite of Conventional banks that make you jump through hoops simply to open a bank account. Setting up merchant accounts for payment is another Kafkaesque task, beset by bureaucracy. However, you can set up a bitcoin address in seconds, no questions asked, and with no fees payable.
* It’s anonymous. Well, kind of. Users can hold multiple bitcoin addresses, and they aren’t linked to names, addresses, or other personally identifying information.
* It’s completely transparent. Bitcoin stores details of every single transaction that ever happened in the network in a huge version of a general ledger, called the block chain. The block chain tells all.If you have a publicly used bitcoin address, anyone can tell how many bitcoins are stored at that address. They just don’t know that it’s yours.
* It’s fast. You can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment.