The recent explosion of cryptocurrencies on the market as of late has left many people scratching their heads and saying, “Just what exactly is Bitcoin?” Though a full description of Bitcoin would take a lot more than a single blog post, here’s a short-but-sweet breakdown of the headlines’ crypto darling.
Bitcoin’s Anonymous Founder
Developed in 2008 by a still-anonymous person named Satoshi Nakamoto, Bitcoin was first developed as a software solution to electronic transfers in a burgeoning internet landscape. It Offered quick and efficient money services unmatched by current systems at the time. Bitcoin claimed it would revolutionize the financial industry and since then it has come pretty close.
Understanding the Blockchain
Every transaction made using Bitcoin is transparent and recorded on a universal ledger called the blockchain, and is updated every ten minutes. As the name implies, the transactions in those ten minutes form a “block” that is stacked on past blocks, forming a “chain” that is viewable by anyone. It, in turn, creates a checks and balances system making it a more secure and transparent option.
Your bitcoins are stored in a virtual wallet that is accessible by using a private key that is known only by the primary user – which makes keeping that key safe a top priority. If you want to buy something or transfer bitcoins to someone else, you can send them to a specific wallet address, much like you would send an email. The transaction can take up to a few hours to process, but you can pay more bitcoin if you would like it to move faster.
Obtaining More Bitcoins
The most straightforward way to gain bitcoin currency is by buying it on an open trading platform like Coinbase, but with enough computing power, you can also mine them straight from the blockchain themselves. Every time your computer solves a specific mathematical problem, you’re rewarded with a certain amount of Bitcoins that you can use.
Advantages of Bitcoin
This highly volatile currency is one of the hottest trends in the financial sector today, primarily because it delivers a few distinct advantages. For starters, Bitcoin transactions are almost completely anonymous, which makes it ideal for people who want to transport large sums of money without a trace. Second, it’s universal, so you won’t have to pay any fees to send money across borders. Third, it’s trackable. Since the blockchain records everything, it’s possible for a government or user to verify proof the transaction itself, which can help with either taxes or to solve identity concerns.