If you've ever heard of Bitcoin, it's probably because of its recent big popularity. With an explosion in the value of Bitcoin price from less than a dollar in 2011 to an average market price of $16,000 as of November 2022, this crypto-currency has seemingly become one of the most popular investments on Earth.
The rapid increase in Bitcoins price has made many people want to invest heavily in this cryptocurrency, with some even believing that the whole world would adopt this new form of currency. Bitcoin is a digital currency not tied to any bank or government; rather, it sits on a peer-to-peer network. The transactions are made using new software built into the internet called the 'blockchain'.
You can buy and trade Bitcoins through various exchanges, but if you're looking to invest in Bitcoins, you'll need to understand how this cryptocurrency works. However, this isn't too difficult, as after reading the following post, you will understand all about Bitcoin and cryptocurrency.
What Is A Bitcoin?
Bitcoin is a digital cryptocurrency created in 2009 by someone going by the name of Satoshi Nakamoto. There is no firm evidence that the creator of Bitcoin is a single person or group of people. Nakamoto has gone about his anonymity as many inventors have in the past.
The idea behind Bitcoin was to create a peer-to-peer payment network that would be completely decentralized. No centralized entity controlled the network, and everyone on it was equal.
Unfortunately, this makes it incredibly difficult to fool a Bitcoin transaction, as this would require a large amount of computing power and an incredible investment. If Bitcoins were to become adopted as an actual currency, they would also be free from government interference and control.
Who Created Bitcoin?
The creator of Bitcoin has gone great efforts to remain anonymous and protect their identity. Researchers have tried to uncover Nakamoto's true identity and found a match for some information about him or her. However, despite this, it is still a mystery who Nakamoto is and how he created Bitcoin.
Bitcoin transactions are made through a peer-to-peer network rather than being processed through banks or other centralized institutions. As a result, no bank or other intermediary is needed, making it extremely difficult to trace any transaction back to its creator.
How Does It Work, And What It's Purpose?
Once you have bitcoins, they are stored in an electronic ledger known as the blockchain. This blockchain is a large distributed database stored on computers worldwide. It's the main way anyone can verify the validity of Bitcoin transactions.
Bitcoin is decentralized and not regulated. This means that nobody owns or controls the bitcoin market, and everyone has access to the same information. The data exists in thousands of servers which are located all around the world.
This process makes it nearly impossible for anyone to manipulate or control the bitcoin system because they would need to either hack every single computer that holds a copy of this ledger or change something in their copy of it while keeping thousands of other copies consistent with each other. Bitcoin also has smart contracts which enable you to put money into a digital contract, which functions like a normal contract, but is self-executing and much easier to perform and verify.
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