Bitcoins had always been in the news but there are lot of people who are still unaware exactly what is bitcoin and is it right for you. Ok, so what’s Bitcoin? It’s not an actual coin, it’s “cryptocurrency”, a type of electronic currency that is autonomous from traditional banking. Bitcoin was invented after research into cryptography Satoshi Nakamoto, software developer (believed to be a pseudonym) who designed the algorithm and introduced in 2009. Although his true identity still remains a mystery.
This currency is not backed by a tangible commodity (such as gold/silver); bitcoins are traded online which makes them a commodity in themselves.
It is an open source product accessible by anyone who is a user having email address, internet access and money to get started.
From where does bitcoins come from?
Bitcoin is mined on a distributed computer network of users running specialized programs or softwares, the network solves certain mathematical proofs and searches for a particular data sequence that produces a particular pattern when the BTC (Bitcoin) algorithm is applied to it. A match would produce a bitcoin. Its complex and both time n energy consuming.
How the bitcoins works?
Internet users transfer digital assets (or bit coins) to each other on a network. There is no involvement of online bank; rather, Bitcoin has been described as an Internet-wide distributed ledger. Users buy Bitcoins with online cash or by selling a product or service for Bitcoin. There are Bitcoin wallets where these are stored and make use of this digital currency. Users may sell out of this virtual ledger by trading their Bitcoin to someone else who wants in. Anyone can do this trading, anywhere in the world.
There are various online portals, smartphone programs or apps for conducting mobile Bitcoin transactions and Bitcoin exchanges, trading that are populating on the Internet.
How is Bitcoin valued?
Bitcoin is not held or controlled by a financial institution or company; it is completely decentralized. Unlike real-world money it cannot be devalued by governments or banks.
As bitcoins supply is finite so bitcoin’s value lies simply in its acceptance between users as a form of payment. Its value fluctuates according to supply n demand and market speculation; as more people invest more in bitcoin, create wallets and hold n spend bitcoins, and more businesses accept it, the value of Bitcoins will rise.