What is a Bitcoin?

Bitcoin is a global digital currency and a payment system. It is the first truly decentralized digital currency and the largest of its kind, in terms of overall market value. The bitcoin system was created and released for public usage around 2008/2009 by Satoshi Nakamoto (a currently unidentified person or group of people). The currency debuted around the time of the 2008 housing collapse/financial crisis. The question of what is a bitcoin is a common inquiry from those that are unfamiliar with cryptocurrencies. The point of bitcoin’s creation was and still is to take power away from the central bankers and governments who usually control the flow of all currencies.

what is a bitcoin

Should You Use Bitcoin?

Like our commonly accepted global currencies, bitcoin can be used to pay for goods, services, or to exchange for other currencies. More and more merchants are beginning to accept bitcoin for products and services. Bitcoin ATM’s are also beginning to spring up in major cities all over the world. Many interested in bitcoin still inquire to what is bitcoin mining. Bitcoin mining is a process that uses your computer to calculate numerous mathematical problems to acquire bitcoin. However, it is not as simple or easy as it sounds. It is much easier to buy bitcoin with a credit card.

How Do You Use Bitcoin?

There are now many comprehensive, combination wallet and transaction services available that will allow you exchange other currencies for bitcoin using credit cards, debit cards, bank accounts, etc. and perform transactions (send/receive bitcoin). One highly recommended combination wallet and transaction service is Coinbase. A comprehensive guide to what is a bitcoin is also often available on wallet and transaction services that pertain to bitcoin.

If you prefer holding your bitcoins in a more private, wallet-only service, while having a different service for performing transactions, Bitcoin Core is the very best choice. It was also created by Satoshi Nakamoto (the currently unidentified person or persons who created the entire bitcoin currency system).

How Are New Bitcoins Created?

The easiest way to understand bitcoin mining and how the overall bitcoin system works is to think of it all as a giant digital ledger. When someone uses bitcoin to pay someone else the transaction is recorded on the giant ledger. Numerous computers all over the world then compete to confirm the transaction by solving high-level, complicated math equations. The winning computer or computer’s owner is then awarded newly created bitcoins. This process is called bitcoin mining.

Basically, new bitcoins are created and rewarded for payment processing work in which individuals all over the world offer their computing power to verify and record payments into the giant public bitcoin ledger. What is a bitcoin is a question that can be easily answered by actually participating in bitcoin mining. Bitcoin mining is the only way in which new bitcoins can be created (think of it as new money being printed).

Should You Invest in Bitcoin?

Bitcoin is currently a very volatile currency and completely uninsured (if you lose it, it's lost and there is no government or central bank policies to protect it). Nonetheless, its potential is exponential. It is unregulated, decentralized, not subject to any tax (unless you choose to declare profits), and basically as private and anonymous as using cash to make purchases.

There are several reasons that bitcoin is an excellent investment tool or simply an excellent currency to start using if you aren’t yet. However, what is a bitcoin and what is bitcoin mining are questions that should be answered and contemplated before you invest your real money into bitcoin.

Overall, the value of a bitcoin has rose steadily since its release. One bitcoin started off at about $1, while one bitcoin most recently was worth $2,791 (June 2017). This huge price increase is a great way to answer any inquiry of what is a bitcoin.

what is a bitcoin
Chart showing the continuously rising value of bitcoin.

Bitcoin continues to increase in popularity. A consistently increasing number of merchants are actively accepting bitcoin. The demand for it is increasing as more businesses and people choose to use it.

Bitcoin is a Finite Currency

Increased usage combined with the fact that there are a limited number of new bitcoins that can ultimately be created means the value of one bitcoin will continue to rise. The answer to what is bitcoin mining lies in the limitation of how many bitcoins can be mined. Currently, 25 bitcoins can be mined or created every 10 minutes. The number of bitcoins that can be mined or created every 10 minutes will decrease every 4 years. Ultimately, new bitcoins will stop being created, around 2110-2140, when 21 million bitcoins are in existence.

The privacy provided by bitcoin is one of the best reasons to start using bitcoin or investing in bitcoin. When someone asks you what is a bitcoin you should stress the privacy and anonymity offered by the bitcoin cryptocurrency. Cash began taking a backseat to credit cards and debit cards a few decades ago. Nearly every one of our transactions is now tracked, monitored, often hit with a fee, etc. Bitcoin brings back the level of privacy our society once had with the usage of cash. When you perform a bitcoin transaction you simply use a unique string of numbers and letters to send and receive the bitcoins. Your name, address, or really any identifying information at all is completely privatized.

The Future of Bitcoin

It is the hope of many that digital currencies slowly and steadily overtake the usage of mainstream currencies, thus putting financial power back into the hands of individuals, on a global scale. The ease of acquiring bitcoin continues to evolve. Currently, you can buy bitcoin with a credit card and you can buy bitcoin with PayPal. If you choose to buy bitcoin with PayPal you must use the Virtual World Exchange. Many still want to know what is bitcoin mining. It’s simply a way to acquire bitcoin without paying for it, but bitcoin mining is no longer an easy way to acquire bitcoin. It is much easier to simply buy it with your native currency.

You should now be able to answer the question of what is a bitcoin. Bitcoin is the first, most widely used digital currency currently available. Though, what is a bitcoin is a common inquiry from those unfamiliar with cryptocurrencies, the answer is simple. Bitcoin is decentralized currency that is controlled by its holders, not the governments of the world. Mainstream currencies are obviously still widely used and very dependable, but every individual should take a moment to acquire a few bitcoins or at least educate themselves on bitcoin. Bitcoin has long been projected to become an increasingly commonplace and heavily used global currency in the next few decades.
Are you ready to invest in Bitcoin?