Getting acquainted with the technicalities of the world of cryptocurrencies isn’t as complicated as a lot of people think. As nations across the globe are seeking for ways to implement cashless policies, cryptocurrencies, otherwise known as digital assets or provide an ideal avenue for the realization of such goals.
Bitcoin is the first and most popular cryptocurrency in existence. The cryptocurrency is finding various forms of implementation already, especially in the financial industry. Bitcoin can be simply seen as a digital coin of intrinsic value which establishes its position as a form of electronic currency.
The Satoshi Creation
Technological advancement marked a milestone when Satoshi Nakamoto integrated Bitcoin in 2009. Bitcoin was basically developed to actualise the world’s goal of switching to a digital economy and it created as a “new electronic cash system” with no presiding authority to have control over over it.
Bitcoin was built as an alternative and virtual form of money with which faster, secure and transparent transactions are carried out. This simply implies that you won’t see a single print of the currency.
The digital currency is powered by blockchain technology which is mainly a digital public ledger with the unique ability of recording and validating sequential transactions at high speeds. As such, tamper-proof transactions are guaranteed while aiming towards gradually negating the need for queuing up to store money at financial institutions.
Bitcoin is majorly set apart from other cash systems due to its decentralised nature. As such, there is no central bank or authority that controls its flow. Instead, its issuance is made possible by mining technology with a team of “miners” with highly-powered computers working together for verifications of transactions.
Mining and Earning Bitcoin
Security and transparency some of the fundamental characteristics of blockchain. With Bitcoin built solidly on blockchain technology, mining is done by satisfying the requirements of the technology.
You see, Bitcoin mining process works by the solving of challenging algorithms i.e. Proof-of-Work (PoW) protocol put forward by blockchain. Thus, as one set of algorithms gets solved, a block of Bitcoin gets processed and is received by the miner. A user would then receive the Bitcoin mined by establishing a Bitcoin address.
Earning Bitcoins is relatively as easy as earning physical money. There are various ways of earning bitcoins. One can choose to accept Bitcoins payment for services or goods by setting up a bitcoin wallet just like setting up a PayPal account.
A simple way of setting up a wallet is via a service provider like Coinbase. This simply guarantees a means of tracking and storing up the coins. Also, quite a vast number of Bitcoin ATMs are popping up in various cities to enable easy access.
How is Bitcoin Used?
Bitcoin can be used to do virtually everything your debit cards would do. I mean, you could decide to pay for hotel bills, airline tickets or your favourite bottle of perfume with the cryptocurrency, provided it is accepted.
However, being a relatively new technology with lots of complexities, its purpose as an electronic cash system has been impeded. Instead the fluctuating exchange rate in recent times has largely re-assigned it to being a digital gold. As a result, it is now widely used as a form of investment.
I mean, you could get a box of pizza for about 10,000 bitcoins in 2009 which if converted to USD, would be worth millions in 2018. Whichever way it is right now, there is a probability that the digital currency could be a major shot in ensuring a digital economy stays in place.