What is Bitcoin?
Bitcoin (BTC) is a digital currency whose real story was hidden by the will of its mysterious creator. Similarly, there is no person responsible for issuing bitcoins and no one can ban usd to bitcoin exchange. The total number of BTCs is limited by a mathematical algorithm and cannot exceed 21 million. Thus, the digital currency has a limited offer, as well as gold. This article deals with the comparison of BTC and gold. Approximately every 4 years the number of bitcoins that are extracted by btc miner is halved. Thus, the mathematical algorithm supports digital currency deficit.
Unlike currencies we are used to, bitcoin is not based on inflation, but deflation. U.S. dollars, euros, pounds and other currencies are gradually losing value. This encourages people to invest money to avoid devaluation. The value of bitcoin can only grow over time. In turn, this encourages users of digital currency to store it, not to spend it, and to exchange usd to btc. In this way, bitcoin becomes both a means of payment and a means of saving.
People who need to transfer money from one country to another, bypassing banks or making a payment with a minimal commission, use bitcoin as a means of payment. It doesn’t matter for them how much is bitcoin at the moment. There are more and more stores that accept bitcoin. Those who believe in the bright bitcoin future, do not follow the current rate fluctuations, investing lasting several years.
How to mine Bitcoin?
Bitcoin mining is the algorithm behind Bitcoin functioning. 1 bitcoin is divided into 100,000,000 parts, called satoshi, after the creator of the system. Sometimes millibitcoin (mBTC, one thousandth) and microbitcoin (uBTC, one millionth) are used. New bitcoins calculates a software algorithm, as a reward for calculating digital block signature. Each block includes transactions that took place in the network in the past ten minutes. The signature of the previous block is used to calculate the next block signature.
This way, the blocks are linked together in a chain, creating a blockchain. If a hacker wants to slip networks his block, he will have to recreate the entire calculation chain, from the first block to the last. This makes an attack on a bitcoin network too expensive and therefore not profitable for the hacker. With each new block, the computational power needed to calculate its signature grows. This calculation, otherwise called bitcoin mining, requires more and more powerful hardware. At first, a calculator was enough for bitcoin mining, then a CPU. With time, they started to use GPU for bitcoin mining, and now they use the best bitcoin miner: specialized devices called ASIC.
However, the mining industry hasn’t become like this right away. When the digital currency began its development, why is bitcoin going up could only be explained by a few dozen people in the world. They knew how to get bitcoins using the computing power of their computer. And it was out of the question to buy bitcoins with a credit card or buy digital currency futures or options on the exchange. It is not possible to say how to get free bitcoin, because for mining digital currency, electricity is used. Rather, we can say that the first enthusiasts who could explain, why is bitcoin going up and how to get bitcoins, got digital currency cheaper than later participants.
However, there are now convenient services that allow buy bitcoin with credit card, and also show you in real time how much is 1 bitcoin. The range of stores that accept bitcoins for various goods and services has expanded significantly. And for those who are interested in how to get free bitcoin, there is such a service as bitcoin faucet. It is a bot that gives out several tens of satoshi once an hour or several hundred satoshi once a day. It’ s not possible to buy something for that sum, but it can already be sent between wallets. Even such a tiny sum is enough for testing network capabilities and bitcoin algorithm.
The bitcoin algorithm logically determines its advantages:
- Decentralization and security. Blockchain database is stored on different computers, does not have a single point and cannot be removed from the blockchain.
- Availability. Anyone can use bitcoin network anonymously, without registering and specifying any data. Not even an email address is required.
- Ability to use bitcoins on a computer and any mobile device that has access to the network.
And together with the advantages bitcoin algorithm causes its disadvantages. The first of them is that the speed of transactions is small and the payment protocol PCI DSS, which is used by Visa and Mastercard, is hundreds of times faster than bitcoins. The second drawback of bitcoin is that mining consumes a huge amount of energy, comparable with the consumption of the whole European country.
However, these disadvantages are not critical and they will be soon overcome. For this purpose programmer, who know bitcoin algorithm deeply, created an additional protocol called Lighting Network. Using Lighting in bitcoin protocol will significantly speed up bitcoin network and its speed will be comparable with Visa and Mastercard. In this case, you won’t need to introduce new, best bitcoin miner.
Where to buy Bitcoin?
There are several ways to buy digital currency. A Bitcoin ATM device that will help you buy Bitcoin urgently. Its lack of high commission, also, the Bitcoin ATM can only be found in major cities in developed countries. Different cryptocurrency exchanges are not a bad option for those who are going to professionally deal with digital currency.
However, now almost all exchanges do not require proof of customer identity, which is not always convenient. The most convenient and safe way to buy digital currency is offered to your attention. ChangeNOW allows you to buy bitcoin with a credit card. All payment data is transmitted in a secure mode. The minimum amount for purchase is only $50. All you need to do is create a wallet for cryptocurrency.
What is the best Bitcoin wallet?
There are both hardware and software bitcoin wallets for digital currency. Beginner users mostly prefer the software bitcoin wallets. There are such bitcoin wallets for both PC and mobile devices. Mobile bitcoin app is indispensable when you need to have a small amount of digital currency with you — for example, on a trip abroad. You can also make a small trial purchase by using online bitcoin wallet. However, for storing large amounts of online bitcoin wallet is not recommended. For storing large amounts of money the best option is a hardware bitcoin wallet. This article will help you to choose the best bitcoin wallet.
At first, bitcoin existed at the idea level. On October 31st, 2008 mysterious Satoshi Nakamoto published a document describing how bitcoin network works. On January 3rd, 2009 the history of the main digital currency began to count down. The concept of digital cash, not tied to banks and states, first interested only a narrow circle of mathematicians. Then the first enthusiasts appreciated the possibility of fast and anonymous payments without the involvement of the banking system. And the number of such enthusiasts began to grow rapidly.
Already in the fall of 2009, 1 BTC could be purchased for 0.8 cents. And in the fall 2017 1 BTC could be sold for 19 000 US dollars. Such growth of bitcoin price during not full decade became possible only due to the practical usefulness of bitcoin app. Speculation and derivatives, such as futures and options, contributed much to the growth of bitcoin price. The authorities of different countries tried to prohibit bitcoins more than once, which briefly led to the fall of btc price. However, bitcoin future is clear. Lighting Network will help to solve problems with network speed.
Soon, bitcoin halving will noticeably reduce the digital currency supply coming from btc miner. Inflation of US dollar and other currencies will cause growing demand from those willing to exchange usd to bitcoin. And the amounts that governments are going to allocate to support the economy are already in the trillions of US dollars. Thus, bitcoin 2020 becomes one of the most attractive investments.
Disclaimer: This article reflects its author’s opinion only and is not financial advice. We take no responsibility for the results of any trader’s decision or action.
How much is 1 bitcoin today and what will be its price in the future, find out in the following article in our blog.