Basics of Bitcoin

What is Bitcoin?

Bitcoin is a digital currency created in 2009. It is decentralized, meaning any government or financial institution does not control it. Instead, it operates on a computer network that uses complex mathematical algorithms to verify transactions and maintain the system’s security.

One of the key features of Bitcoin is that it is built on blockchain technology. Blockchain technology is a distributed ledger that records all bitcoin transactions securely and transparently. The ledger is maintained by a network of computers, called miners, that compete to solve complex mathematical puzzles to verify transactions and add them to the blockchain.

Why has it become so popular?

Another critical feature of Bitcoin is that it is limited in supply. There will only ever be 21 million bitcoins; as of December 14, 2022, about 18.7 million have already been mined. The built-in scarcity is one of the factors that has contributed to the rise of Bitcoin.

In recent years, Bitcoin has gained much attention as an investment asset. Its value has been highly volatile, with significant price fluctuations over short periods. This volatility has attracted investors looking to make quick profits and those who see it as a long-term store of value.

Some people see Bitcoin as a revolutionary technology that has the potential to disrupt the traditional financial system, while others are more skeptical and view it as a speculative bubble.

Summary

Bitcoin is a digital currency that uses blockchain technology to enable secure and transparent transactions. It is decentralized, limited in supply, and has gained much attention as an investment asset. However, its future remains uncertain, and it continues to be a controversial topic.