You might have heard the term ‘Bitcoin’ several times in the past few years. The Internet is flooded with stories of people increasing their money by 10, 100, 1000 times and turning millionaires by investing in Bitcoin.
So what is Bitcoin?
Bitcoin is a digital currency that was created in 2009. There’s no information on the Internet about who created Bitcoin. Satoshi Nakamoto is the term used by the person/group of people who created Bitcoin. The biggest property of Bitcoin is that it is a decentralized digital currency. This means no central bank or authority has control over it.
To understand Bitcoin better, we will first have to understand digital currency and Blockchain technology.
Digital currency is something that exists in electronic form. It contradicts the idea of cash payment. Digital currency involves the transfer of money using electronic means. Bitcoin is the most important Digital currency in the world right now.
The word Blockchain is a combination of two words- Block and Chain. As the name suggests, Blockchain is a specific type of database where data is stored in blocks, and the blocks are chained together to form collective data. Every time new data arrives, it is fed into a new block, and once the particular block is filled, it is chained with the previous block.
Blockchain technology is mainly used as a ledger for transactions. The reason behind it is that it is a decentralized technology and eradicated monopoly.
Bitcoin, too, uses blockchain technology. Since decentralized blockchains are immutable. Bitcoin transactions are viewable to all. That guarantees complete transparency while trading in Bitcoin.
Since Bitcoin is a cryptocurrency, it is not available in physical form. Abbreviated as BTC, Bitcoins do not have the backing of any central bank or government. By market capitalization, Bitcoin is the world’s largest Cryptocurrency. Bitcoin’s massive popularity and mass acceptance paved the way for the launch of several other cryptocurrencies collectively referred to as Altcoins.
The price of Bitcoin has skyrocketed in the past few years, and at the time of writing this article, it stands at nearly $54,000. However, the all-time high value of Bitcoin is $63,729.5. In Bitcoin, transactions are verified by network nodes through cryptography and recorded in a public distributed ledger. This public distributed ledger is nothing but Blockchain.
It is the first digital currency in the world to facilitate instant payments using peer-to-peer technology. Those familiar with Bitcoin must’ve come across the term ‘Bitcoin Mining.’ Yes, the concept behind mining is the same as what they do in a coal mine or a gold mine. The only difference is that Bitcoin mining is done on computers. Mining is the process of solving a computational puzzle to create a new puzzle.
Also Read, Cryptocurrency: A bright future or just a passing trend?
The reason behind the price of Bitcoin being so high is its limited supply which is 21 million. Out of 21 million, 18,691,925 Bitcoins are in circulation. The number keeps on changing every 10 minutes as new blocks are mined by miners. Once all the 21 million Bitcoins are mined, the price will go further higher. The price and market dominance of Bitcoin affects other cryptocurrencies too. This is why it is the most dominating Cryptocurrency in the world.
Bitcoin can be purchased through different national and international exchanges available in different countries. In India, Zebpay and WazirX are the two most popular exchanges where you can purchase Bitcoin. The best thing about trading in Bitcoin is that you can purchase it infractions, e.g., 0.0002 Bitcoin. You can also use Bitcoin to purchase other cryptocurrencies in BTC pairs.
Several organizations have started Bitcoin as payment. Big businessmen like Elon Musk also trade in Bitcoin. MicroStrategy is one of the biggest players in the market. Traders who invest huge amounts of money in Cryptocurrency are referred to as ‘Whales.’
