After the invention of bitcoin, its popularity exploded, and the invention of this first cryptocurrency encouraged thousands of developers. In 2009, the new trend of cryptocurrencies started, and that was when blockchain came into existence. Bitcoin was the first blockchain application that was introduced, and it has gained the interest of not only investors but also businesses and government. Due to the financial crisis in 2009, people distrusted fiat currencies, and bitcoin became a great alternative to traditional investments. Moving forward, we will gain in-depth knowledge about bitcoin.
What is Bitcoin?
Bitcoin was the first cryptocurrency that was developed with a blend of two technical terms currency and cryptography. It is a decentralized digital currency that was created by an individual or a group of individuals known as Satoshi Nakamoto. The real identity of bitcoin is still unknown as Satoshi never revealed his identity. Satoshi wanted to create a currency that is digital and is independent of third parties and created bitcoin as a decentralized currency.
There are many ways of acquiring bitcoin, but the two main ways to acquire bitcoin include buying and mining. There are a plethora of ways to buy bitcoin as one can do it by bitcoin exchange, bitcoin ATMs, and more. Users can easily buy bitcoins by signing up with exchanges. Another main method to acquire bitcoin is mining. Mining is done by miners who use specialized, powerful computers to solve difficult mathematical algorithms, and they are rewarded with newly minted bitcoins.
Most of the newly created cryptocurrencies, including bitcoin and all, are based on blockchain. Blockchain is a distributed public ledger, and the miners do the work of verifying the bitcoin transactions and recording them on the blockchain. Every use of the bitcoin network can view the blockchain’s ledger, which is used to authenticate the transactions.
People get confused about the two features of bitcoin, which include being transparent and anonymous. Users think that the bitcoin network cannot accomplish both at the same time, but yes, it is possible. The blockchain ledger is transparent, which means it makes it easy for every user to trace the bitcoin transactions, and an anonymous feature is achieved because bitcoin wallets don’t require users to fill in their details. It always remains anonymous that who owns the digital wallet, and therefore bitcoin network achieves both user anonymity and transparency at the same time. For more information you can Read here
Why bitcoin has value?
The main aim of bitcoin and other cryptocurrencies is that it has become the main medium of exchange like traditional currencies. The major difference between bitcoin and traditional currencies is that banks or the government don’t control bitcoin. The price of bitcoin isn’t backed by the government or anything, unlike fiat currencies. The demand and supply of it determine bitcoin’s value, and therefore, users need first to buy it to use it in the real world.
Bitcoin is a computer code, and the thing that is uncontrollable about bitcoin is its limited supply. Only a limited amount of bitcoin is ever created, and the fixed amount of bitcoin makes it more challenging to obtain. The scarcity of bitcoin makes it a valuable asset, and it has attracted investors so much that a lot of expert and young investors are coming forward to invest in bitcoin. Many businesses and companies are growing in this competitive world, and bitcoin is helping them. Bitcoin offers great returns on investors’ investments, and the users don’t have to pay any interest rates to the government. Bitcoin is more like gold, but the only difference is that bitcoin isn’t backed, and the market of bitcoin is highly volatile.
Does bitcoin make a good investment?
If we consider investing in bitcoin practically, bitcoin is a risky investment, and therefore, if you are free and observe the bitcoin market keenly, you can invest in bitcoin. Investing in bitcoin completely depends on the investment goal and risk profile of users. Bitcoin’s value depends on the demand and supply of it, and because of its limited supply, it makes a good investment. But users must understand how to buy bitcoin and learn the mining and investing process of bitcoin.