The recent rise in Bitcoin price has got everyone talking about it. Many people who had never heard of Bitcoin have now developed a liking for it. They are baffled by what exactly is Bitcoin and how it really works – so let us explain.
What is Bitcoin?
Bitcoin is a digital currency that only exists on the internet. It enables people to make international transactions swiftly and without restraints. The best feature of these coins is that anyone can own and use them in any part of the world.
The fact that Bitcoin uses its own network for international transactions gives it an edge over other currencies. It puts the users in complete control of their money and enables them to transfer funds globally without mediators like PayPal or banks.
A Glance at the History of Bitcoin and Bitcoin Price
The word Bitcoin first appeared in a white paper published to the P2P Foundation’s site in 2008. The author’s name was Satoshi Nakamoto, and his true identity is still unknown.
It discussed the concept of virtual currency with a decentralized system – implying that it didn’t need a central bank. Instead, the transactions were to be recorded by a public ledger called Blockchain to avoid hackers’ attacks.
The idea didn’t take long to get the hype, and Satoshi mined the first bitcoin in January 2009. Shortly after, he made the mining software public and made the first transaction of 10BTC to a computer programmer Hal Finney.
Next, people around the world started mining Bitcoin and cryptocurrency exchanges were built to facilitate users. That was the first time in history when people were able to transfer funds without relying on intermediaries.
From that moment on, Bitcoin price has become the talk of the town and gained interest from the vast majority of people.
Is Bitcoin Secure?
Security has never been an issue with Bitcoin. In fact, it’s the most secure digital currency out there because it uses Blockchain to record transactions.
Blockchain is a revolutionary system to protect Bitcoin and works by sharing the same public ledger with everyone in the network.
To transfer coins, the users must solve complex math problems and upload changes to the ledger. If the network agrees, the change is made. Otherwise, it will be overruled.
Blockchain’s structure is one of a kind and incredibly secure for not only crypto protection but also storing identity information and confidential data that hackers might attack.
How to Earn Bitcoin?
To earn bitcoins, you must join its network that comprises individuals with computers, also called mining nodes.
The individuals that run these nodes are called miners.
Miners use open-source software on their computers to mine bitcoins. However, as the Bitcoin price and mining difficulty increase, the hardware needs updating as well to keep pace.
Remember that miners are an essential part of the Bitcoin network as they clear and resolve transactions across the globe. Moreover, they are responsible for verifying that users have sufficient funds on their e-wallets to send or if they’re trying to send the same bitcoin to multiple recipients.
In addition to verifying transactions, miners are responsible for compiling them into blocks. After that, they are required to complete these blocks by solving mathematical puzzles. Miners that successfully solve their problems are rewarded with some fresh bitcoins.
An interesting fact about bitcoin mining is that the reward for completing new blocks halves every four years. And the halving will continue to happen until the year 2140 as this will be the year the last batch of 21million bitcoins is mined.
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Bitcoin Price – How To Send Or Receive Bitcoin?
People use Bitcoin addresses to make transactions. These transactions work very similarly to how the emails work. Just like you need an email address to send emails, Bitcoin address is what people use to send bitcoins to their families, friends, or businesses.
Remember that you can send any amount of Bitcoin to any part of the world. Unlike traditional currencies such as the dollar or pound sterling, Bitcoin can be traded in all sizes. For example, if you see a $10 hoodie online and you want to pay in Bitcoin, you can easily send the same amount in bitcoins in at any moment.
What Determines The Value Of Bitcoin?
Bitcoin price depends on supply and demand of the currency. In times of high demand, Bitcoin increases in value, but when the market falls, so does the price.
There is only a paltry amount of bitcoins available, and the new coins are generated at a decreasing rate, which means that as the bitcoins become more common, their price decreases. However, this is not always true because Bitcoin is still a small market compared to the traditional currency. Hence, it doesn’t take a significant amount of money to influence its price.
Apart from supply and demand, the price of Bitcoin also depends on the expectations of it becoming more useful to society. Every change in those expectations affects Bitcoin price directly. For example, if there is a potential of breakdown or a rise of more efficient currency, the value of bitcoin will be immediately affected by it. That’s why its price is so volatile.
Do Big Companies Accept Bitcoin Payments?
Yes, there is a myriad of companies that accept Bitcoin. To help you discover those brands, we have compiled this list which includes some big and small brands.
- Microsoft – accepts bitcoin since 2014
- Newegg – accepts bitcoin with a few restrictions on a range of items
- Wikipedia – takes donations in Bitcoin
- BMW – lets you purchase vehicles in exchange of bitcoin at its UK and US dealerships
- AT&T – offers Bitcoin payment option through BitPay
- Shopify – allows merchants to sell products online and receive Bitcoin payments via BitPay
- KFC Canada – KFC in Canada allows clients to pay in Bitcoin
- Overstock – a famous American brand that accepts Bitcoin for its online orders
- Namecheap – lets customers purchase domain names through Bitcoin
- Rakuten – one of the largest online retailers that accept Bitcoin
This was the essential information about Bitcoin price and other relevant factors of the crypto market. If you have an interesting piece of information that we forgot to mention, please share it in the comments below.