Bitcoin – An Explanation
It is thought that around 5.8 million people have a cryptocurrency wallet, with the majority using bitcoin as their choice of currency. As the use and value of the digital currency continues to grow, what is it exactly? And how does it work? As well as bitcoin there has recently been the development of bitcoin cash. Let’s delve deeper into the subject.
Bitcoin – What is it?
In 2009 a brand new currency for the digital age was created. Bitcoin would utilise decentralised technology to store money and to offer secure payments and transactions without any fees, and without the need of banks or even the names of individuals. It was seen as a call for action to liberate money and the way modern society and traditional currency had tied us all down, in the same way that the Internet has freed up the flow of information for every person.
Who Invented it?
The secretive inventor of Bitcoin is Satoshi Nakamoto. The name is thought to have been created by an unknown person (or group of individuals) who designed bitcoin, as well as the development of the first blockchain database and resolving the problems of double-spending within digital currency. A number of non-Japanese experts in computer science and cryptography, living in Europe and the US, are thought to be behind bitcoin.
How Does it Work?
A decentralised record of all transactions completed by network users is collected through a public ledger called ‘blockchain’. Users must generate blocks on the network in order to create bitcoins, with each block created using the power of each user’s computer power and adding it to the blockchain. This system is powerful as it means that users can continue earning by keeping the network up and running. There is a limit to how many bitcoins can be created, with the total figure just under 21 million bitcoin (at current estimates there are around 16.5 million bitcoin in circulation).
Who Uses it?
The fact that bitcoin works from a decentralised platform, without interference from banking institutions and government, has meant that it is the perfect tool to make private and anonymous transactions. It is fast becoming more popular as a way of making secure payments online and at certain retailers in the UK, including some restaurants, bitcoin betting sites and a handful of bitcoin ATMs. Many people hold on to bitcoins in an attempt to see how much it will increase in value over the years, and despite volatile price changes at certain periods, those early investors are sat on a fantastic investment. If you are considering making an investment in bitcoin it is inviting as it is safeguarded against fraud and theft, as well as having no fees attached to investment and transactions.