Bitcoin, launched in 2009 by Satoshi Nakamoto, is the very first cryptocurrency in the world. Bitcoin was created to simplify transactions and make them more secured. This system allows two parties to transact directly without any need for the involvement of a third party. Nowadays, however, Bitcoin serves more as an investment rather than means of payment.
How does it work?
Bitcoin is based on a decentralization system that is not dependent on financial transactions made by any bank or government, thus it can be regulated neither by them nor by its founder. Comparing it to regular Fiat (money we use - dollars, euros, etc.), where banks and governments regulate cash flows, Bitcoin is powered by peer-to-peer technology (P2P). P2P technology omits the need of the central serve or third party. All transactions are kept in a system called Blockchain. But the specific transaction can be decoded by a sender and a receiver only.
Blockchain
Blockchain is like a ledger containing all the transactions. Each transfer is a block that is chained to the ledger. The transactions need to be accepted by miners who verify it, for which they receive a reward = bitcoin (basically the fee connected to the transfer). This act is called mining. The total amount of Bitcoin that can be mined is 21 million. Blockchain is the central ledger for all cryptocurrencies.
The price
The value is determined by what people will pay for it. Because there is a limited number of bitcoins, they can be compared to gold. However, without any government or bank, the price can change immediately. Therefore, it is not recommended to put your whole fortune into bitcoin.
How to buy bitcoin?
To buy a Bitcoin is super easy. You can either buy it online on any exchange of your preferences or choose any bitcoin ATMs. Either way, the transaction is fast and secure. Also, there is a false belief that you need to hold the whole bitcoin. Due to the price, it can discourage a lot of people. However, the truth is that you can own only a small part of bitcoin - it’s not necessary to buy the whole one. Another step is to protect your portfolio, so the software or hardware wallet is more than essential.
