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What is Bitcoin? Featured

Written by  Jan 24, 2020

Bitcoin is a cryptocurrency created back in 2009. Marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies.

Bitcoin was a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks or institutions are involved! Bitcoin can be used to book hotels on Expedia, shop for furniture on Overstock and buy Xbox games. But much of the hype is about getting rich by trading it. The price of bitcoin skyrocketed into the thousands in 2017 and has traded up and down since but not the extremes of 2017..

Why bitcoin?

Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.

bitcoin day trading
Buying bitcoins

Buy on an Exchange

Many marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Coinbase is a leading exchange, along with Bitstamp and Bitfinex.

Mining

People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins are created. Currently, a winner is rewarded with 12.5 bitcoins roughly every 10 minutes.

bitcoinwallet anime
Bitcoin Wallet

Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured by the FDIC.

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Bitcoin's anonymity

Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice for people online buying drugs or other illicit activities.

Bitcoin’s future

No one knows what will become of bitcoin. It is mostly unregulated, but some countries like Japan, China and Australia have begun weighing regulations. Governments are concerned about taxation and their lack of control over the currency.

If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.

Do you find this article useful? Comment below or follow us on Facebook or Twitter.

Peter Flynn

Senior Editor and self confessed Crypto addict, bringing a variety of Crypto tech news, help and advice in the UK. I have worked in various fields throughout my career such as a Systems Administrator, Cyber Security Consultant and other technical related roles, these days I concentrate on Cryptocurrency journalism and technical writing.

1 comment

  • Paula Stevens
    Comment Link Paula Stevens Thursday, 07 May 2020 13:09

    Excellent explanation, thank you for sharing

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