Bitcoin was created as a digital crypto-currency to form a way to spend money that would not be controlled by any one entity. Bitcoins are not a physical currency like the dollar or the euro, but are rather created by people. Bitcoins are produced by computers solving advanced mathematical problems across the world in a method known as mining. As businesses start to feel a need to rely less on the government, Bitcoins are becoming increasingly popular.
What’s so Different About Bitcoin?
Since bitcoin can be used to buy things online, just like any other conventional currency, its is a multi-purposed method of handling money.
The most important aspect of bitcoin that essentially defines its creation is the fact that it is decentralized. This means that there is not one bank, government, or institution that has any individual control on it. This can put people in a more confident state of mind given that their money cannot just be taken for reasons like taxes and so on.
Who is Behind Bitcoin?
A computer programmer and software developer named Satoshi Nakamoto came up with the idea for the crypto-currency, which he stated was an electronic payment method that was simply based on mathematics. The main notion behind its creation was to produce some sort of currency system that was free from the centralization and authoritarian currencies we already had in place, that could be given and gotten electronically in an instant.
Where Does Bitcoin Come From?
In the sense of who prints bitcoin, there is no one person. Bitcoin is different from other currencies given that it is not printed as a physical piece of money. It essentially has been forming its own guidelines since its creation. With the supply of bitcoin not being created by one entity, the currency cannot be devalued by the printing of more currency.
Bitcoin is all done online. The way bitcoins are gotten is in a method known as ‘mining’. Mining essentially means that high powered computers search through advanced mathematical equations and code to find the bitcoins. Within this network bitcoins can also be transferred and processed, which makes it its own complete system.
Why Can I Not Have Unlimited Bitcoins?
You essentially cannot create unlimited bitcoins because there is a limit to the amount that are made. Satoshi came up with a solution to this, having the main bitcoins having the ability to divide into a one hundred millionth of one bitcoin which is appropriately named a Satoshi.
What Backs Bitcoin?
Most people know that most currencies are based on a physical commodity such as gold or silver. If you have one dollar, that dollar is theoretically backed by a commodity that is worth the actual value. Bitcoin is based not on a commodity, but on mathematics.
By mathematics, it means that around the world people are using open-source (anyone can use it) software to follow an advanced mathematical problem (which is also available to anyone).
What Separates Bitcoin From the Rest?
1. It’s not a centralized currency. No one central body can control it, and all of the software is open source meaning that anyone with a computer can essentially participate in the using of bitcoin.
2. It’s easy to use. Since banks often require social security numbers and personal information as well as various different requirements, it can be difficult to set up a bank account. With bitcoin, you can set up an account in minutes with total anonymity.
3. It’s anonymous. Users can have bitcoins set up with multiple accounts and addresses which are not linked to any one person or any personal information.
4. It’s all transparent. The entire network of bitcoin is stored in logs that anyone can access called the blockchain.
5. The transaction fees are extremely small. While many banks may charge for international money transfers, bitcoin doesn’t.