What is Bitcoin?
Bitcoin is the first cryptocurrency in the world; it was created in early 2009 by someone with the nickname Satoshi Nakamoto, but the identity of the creator has been kept a mystery.
Bitcoin is also known as digital or virtual currency because it has no physical form in the real world. Unlike traditional currencies, bitcoins are not issued by a central authority and are completely immune to government manipulation. So Bitcoin is independent of any system and depends only on the power of the blockchain.
What is the blockchain?
Blockchain is a type of database where the information collected is stored electronically in blocks that are chained together. When the first block is filled with data, then a second block is created to be used for storing the new data, etc.
This technology makes the timeline of the data irreversible and allows everyone to know the exact time of adding each block in the chain.
Bitcoin is based on blockchain technology, and uses this type of database to store information about all Bitcoin transactions.
How are bitcoins earned?
The blockchain used by Bitcoin to store the transaction information is not based on computers owned by Bitcoin. Instead, the Bitcoin blockchain relies on the computers of independent people participating in the Bitcoin network. These individuals, also known as “miners”, participate in the network with the computer power of their devices to process the transactions on the blockchain.
So every time a transaction is made, miners try to solve difficult mathematical problems using their computers in order to validate the transactions and add a new block to the blockchain. In return for the energy they used, and for their contribution to the network, miners receive a number of bitcoins as a reward from the system.
Many Bitcoin holders choose to trade their currencies, making buying bitcoins easy: read a guide on buying and selling bitcoin.
Should you invest in Bitcoin?
Bitcoin is considered by many to be the biggest financial innovation of the fourth industrial revolution. We can all agree that it changed the way we think about money and how we deal with it, but should we take it a step further and start investing in Bitcoin?
People who criticize Bitcoin more often than not are skeptical about its volatility. But if we look at the price performance of Bitcoin in previous years, we can see that it has made many impressive gains since its creation, despite the unexpected ups and downs.
Moreover, the price of Bitcoin has climbed steadily since September 2020 after PayPal announced that US customers will be allowed to buy and sell the digital currency starting from 2021. So it was no great surprise when , on January the 8th, the price of Bitcoin broke. passed $ 41,000, breaking all records.
In conclusion, investing in Bitcoin is risky, as is every other investment. Before stepping in, research must be done so that the decisions are made wisely.
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