The financial world may be a bewildering place, full of strange jargon, exotic kinds of currency, and seemingly limitless trading opportunities.
Unfortunately for individuals who aren’t as tech-savvy, the internet’s inclusion into our everyday lives has allowed the financial sector to evolve.
There have been new currencies formed in addition to the vast banking, payment, and stock options that have been the norm online.
These cryptocurrencies, which are digital currencies with security and validity encryptions, have a real value and may be exchanged for USD, GBP, or any other sort of physical currency through online alternatives.
Bitcoin, the most prominent sort of virtual currency, has continuously grown in popularity and strength since its inception on January 3, 2009.
At first sight, Bitcoin may appear perplexing; nevertheless, the following ten facts will truly clarify what bitcoin is and how it came to be in layman’s words.
#1. This money is not controlled by a single entity.
Confusing? At initially, most people believe the same thing.
The main concept of currency and money is that it is controlled by a bank, that its value fluctuates depending on the worldwide market, and that it can be physically held.
All of these are defied by Bitcoin.
It is, in fact, under the control of everyone who uses bitcoin, as the software that runs the currency logs and validates who logs and validates bitcoin transactions throughout the world.
#2. Bitcoins are limited in number.
You’d think that since there’s no need to physically print banknotes or issue coins, there could be a limitless amount of bitcoins in circulation.
However, this would devalue the currency to the point that it would be useless.
There are exactly 21,000,000 coins instead.
#3. Bitcoins do not have a fixed or inherent worth.
When you look at a dollar bill, you can see that it’s just a piece of paper with a number and some fancy drawings on it that say it’s “worth” $1.
It only has value when we say it has value.
The same is true for bitcoins.
Those tiny bits of digital code are only valuable because people claim they are and wish to exchange real goods and services for them.
The more popular bitcoin becomes, the more value each individual bitcoin will have.
#4. You have access to all transactions.
Bitcoin’s distinguishing feature is that it is totally transparent.
No, not with personal information, but with transactions and quantities.
Everything is visible on the blockchain, and it is this complete transparency that gives the Bitcoin community a sense of trust and security.
#5. You can mine bitcoins.
Mining bitcoins is a word that refers to the process of solving mathematical problems with computer software in order to validate numerous transactions all over the world.
For solving certain difficulties, bitcoin miners are rewarded a set amount of bitcoins.
#6. You cannot cancel or be forced to pay a transaction.
One of the most important characteristics of bitcoins is that you cannot be forced to pay or reverse a transaction.
You cannot reverse a transaction in which you transfer a corporation’s bitcoins in exchange for a product, nor can they bill you again and compel money to be taken out.
#7. You can send money for free or for a small cost.
If you were in the UK and wanted to send money to a buddy in Thailand, you’d have to pay bank transfer fees, currency conversion fees, and more.
In addition, your friend may have to wait a few days before receiving the funds.
There are essentially no transaction costs with bitcoins, and the money is available almost quickly!
#8. Digital wallets are used to store bitcoins.
You have a bitcoin wallet when you sign up, much like you do when you log into your online bank account to check your balance.
This wallet functions similarly to a physical wallet, however, it is far more secure.
If you lose it, it’s gone for good; however, individuals can’t take money from your wallet until you give it to them.
You can also see how many bitcoins someone has if you know their bitcoin address.
#9. If you lose your wallet, your bitcoins are gone forever.
The bitcoins in the wallet may still exist because they were recorded on the blockchain, but they cannot be used because the wallet has been lost.
Because these bitcoins have unique keys, they are effectively withdrawn from circulation if they are lost with a wallet.
#10. Bitcoins can be used to purchase genuine goods.
Bitcoins may appear absurd at first, but they are a genuine currency that can be used to purchase real goods.
Bitcoin is accepted as payment by a wide range of merchants, including both online and physical stores.
Newegg, Overstock, Microsoft, Dell, and more well-known online retailers accept bitcoins.
Reeds Jewelers, One Shot Hotels, Holiday Inn (New York), and even local pizza businesses, eateries, and more are among the in-person stores.
You can even use bitcoin to fuel a gambling habit, purchase gold bullion, or make a charitable donation!