Bitcoin (BTC) was created by Satoshi Nakamoto in 2008, and it was released as open-source software in 2009. It is known as the first cryptocurrency. Bitcoin is not attached to a state or a specific government, releasing it from a central issuing authority or a regulatory body. There is no establishment deciding when to produce more Bitcoins, monitor, detect, or inspect fraud.
Twenty-one million bitcoins were issued, and based on the protocol; no more will be created in the future. Now there are still around 3 million Bitcoins available to be mined, and it’s projected that the last one might be mined around 2140.
How does Bitcoin work?
Bitcoin is a global currency, and you can use it all around the world, without the need to exchange it. One of the most important components of Bitcoin is a global ledger, called the blockchain. The blockchain registers every transaction that has ever been made. Volunteers verify the accuracy and keep track of every transaction through specialized computers known as “mining rigs”.
Bitcoin & Blockchain
The Bitcoin network holds an ongoing lottery in which all the miners worldwide compete to be the first to solve a math problem. Every 10 minutes, a winner updates the blockchain ledger with the new information and gets a prize. Every 210.000 blocks the number of coins generated when a block is added is cut in half. What started as a re-compensation of 50 Bitcoins, decreased to 6.25 in May 2020, with the idea that limiting the number of coins will increase their value.
How to get Bitcoins?
First, you will need to verify your identity when registering for a digital wallet via personal documents. Once you have a wallet, you can buy Bitcoins from traditional payment methods, like credit cards, bank transfers, or debit cards.
When you join a Bitcoin network, you will be given a public key (a code made of letters and numbers), which is where the transactions are deposited to or received from. This is how you are recognized on the blockchain ledger.
You will also get a private key that only you will know (a personal password). It will be required to make your Bitcoin transmissions.
You can find Bitcoins on marketplaces called “exchanges”. These are digital platforms where you can exchange money for cryptocurrency. Larger amounts of coins can be stored in more secure wallets, with a multi-signature facility, where they will be available online or offline.
PROS
- Transactions using BTC are simple and very similar to those you make using your credit card.
- It’s the first blockchain-based cryptocurrency in the world and the most successful one.
- Using BTC is more private because you don’t need to provide personal information unless something is being delivered to your address.
- It is safer to make payments when compared to other options, due to its cryptographic complexion. Information about Bitcoins and its users’ codes is always available on its network, so there is no room for manipulation.
- According to researchers, Bitcoin could go over $397,000 by 2030.
CONS
- Being one of the most used cryptocurrencies makes it profitable for hackers and criminals to attack it.
- Bitcoin has a big amount of liquidity, and it is very easy to be exchanged. Even though this is very promising, it doesn’t protect Bitcoin from big market swings.
- Being decentralized makes it impossible for any party to intervene in disagreements between users. Those affected by transaction fraud can’t request a refund through Bitcoin.
Overview
Bitcoin (BTC) was created by Satoshi Nakamoto in 2008. It’s the first blockchain-based cryptocurrency and the most successful one. Bitcoin is a global currency, and you can use it all around the world, without the need to exchange it. Twenty-one million bitcoins were initially issued. Based on the protocol, no more will be created in the future. There are still around 3 million Bitcoins available to be mined.
Bitcoins can be found on digital platforms where you exchange money for cryptocurrency. Transactions using BTC are simple and safe. According to researchers, Bitcoin could go over $397,000 by 2030.
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