These days, there are several types of digital currencies that we can use to purchase something using a software that might solve mathematical problems. So what about Bitcoin? It is created and used electronically as a form of digital currency. Businesses, especially those which are in the computer industry that uses software commonly use it.
You might be confused what it looks like, but from the word digital, these are not like dollars and other types of currency because these aren’t printed. No one controls it such as banks or other people and establishments.
Who has founded Bitcoin?
Based on a mathematical proof, Satoshi Nakamoto, a software developer proposed Bitcoin. He has this idea of having an independent currency of any central authority which can be transferable electronically with instant low transaction fees.
So how do you differentiate it from the normal currencies?
Just like conventional dollars, yen or euros, which can also be traded digitally, it can also be used to purchase things electronically, but being decentralized is the unique characteristic of it.
It can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally. In that case, we can say that it is not owned and controlled by an institution. Lots of people find it comfortable to use because they are assured that even a large bank has no control of their money.
Is it printed? Who is authorized to print it?
The answer to this question is no one. Nobody is authorized to print it because is a digital currency. If you want to get more of it, you have to do bitcoin mining using a computing power of a distributed network. A network consists of people and anybody can join it. Bitcoin is also processing transaction so it is also considered as the payment network. You can’t also churn out unlimited bitcoins because they have this thing called bitcoin protocol in which only 21 million bitcoins can be created by miners and will be divided into small parts. Satoshi is the name for the smallest amount as one hundred millionths of it.
From what is it based on?
To make it short, it is not based on the traditional basis of a currency like silver or gold because as we mentioned above it was made and based on mathematics. It is known that software programs follow a certain mathematical formula to produce bitcoins and this formula is available for anyone for free.
How can they exchange the money on their banks account to bitcoin?
Since it doesn’t need a bank account, the bitcoin wallet is going to be one. You have to deposit money according to the supported exchange to its own account exchange and then these balances can be used to trade with the other users of the said exchange so that they can withdraw the money. You have to do the exchanging by buying or selling orders. If you’re thinking that it is just like PayPal or the Western Union, the answer is no. Bitcoins are the currency with a system for a built-in transfer.
What bitcoin wallet to use, and what website to use to exchange money to bitcoin?
There are many bitcoin wallets for you to use and with their websites, you’ll learn more on how to use it in exchanging money to bitcoin.
Bitcoin and its characteristics
Here are unique characteristics of Bitcoins compared to the different traditional currencies that we know.
Easy to set up
Bitcoin is easy to set up compared to banks. You do not have to go out and spend some time to open an account. It can be set up within a few seconds for free.
If you want to be anonymous with different transactions, it is the best option for you.
Low Transaction Fee
Banks will charge you higher amount every transaction, but Bitcoin doesn’t and that’s one of the best things.
It is not controlled by anyone.
As soon as the network process the payment, the money will arrive after a few minutes and you can send it anytime, anywhere.
Are you curious enough to try Bitcoin? Go ahead!