What is Bitcoin?
Bitcoin is 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! There are no transaction fees and no need to give your real name. More merchants are beginning to accept them: You can buy webhosting services, pizza or even manicures.
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.
Many people who are concerned about privacy like to use Bitcoins for this reason.
They are bought and sold through exchange sites. There they can be exchanged into traditional currencies like the Dollar or Euro or for virtual world currencies like the Linden dollar.
Bitcoins have no central control so they cannot be controlled by any government or authority. There are also no chargebacks.
There is a limit to how many can be created. There can be 21 million Bitcoins in total. This is to avoid the currency from becoming worthless from overproduction like fiat money. Diminishing geometric expansion combined with the expansion of Bitcoins provides an incentive for early adopters.
There are some scenarios of for failure that could happen to Bitcoins. These include a currency devaluation, a declining user base and a global government crackdown on the software and exchanges.
In order to get started to generate and trade Bitcoins you have to download and install what is called a Bitcoin client to your computer. This will give you the Bitcoin wallet and address. When people want to pay you give them your Bitcoin address and they send it to there.
If you want to make Bitcoins you are going to have to mine them. You do that by giving up your processing power to the Bitcoin network so it can encrypt transactions. You can create one block every ten minutes. Every block is 50 Bitcoins. You can use your computer to generate them when you are not using it or create mining rigs dedicated for that purpose.
Bitcoins are a true 21st century currency. If you want to see how currencies of the future will be like download the Bitcoin client and start mining and trading today.
The bitcoin price is very volatile and has seen some large fluctuations since its inception in 2011 when you could buy one bitcoin for just a few cents. Since then the bitcoin price has increased each year until it reached its high of $1200 per bitcoin in late 2013. After that, the bitcoin price has declined to $300-$200 per bitcoin where it has stayed for quite some time. Now it would seem that the bitcoin price might be on its way up again. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.