Digital currency, and Bitcoin in particular, are all the rage today. But, what is Bitcoin exactly and how does it work? Is it safe and does it require complicated tools to get started? These are some of the questions that have confused many, especially beginners who are unfamiliar about the inner workings of cryptocurrency and Bitcoin.
If you are one of them, then you need not worry. ChainMyne is here to help. Here is a brief analysis of the most asked questions regarding Bitcoin. By going over them, you’re sure to get your Bitcoin 101 basics sorted in no time. Read ahead to learn more.
What Is Bitcoin?
Bitcoin (BTC) is a digital currency that operates on a peer-to-peer transaction model. It differs from fiat currency such as Canadian dollars (CAD), US Dollars (USD) and euros (EUR) by eliminating the presence of a third party or financial institution.
It started out being virtually worthless in terms of US dollars, but BTC’s price rose to become worth more than $60,000 per coin. It is often seen in the crypto industry to be a store of value or digital Gold rather than a currency.
Why is Bitcoin Better?
BTC has come a long way since its creation in 2009. The anonymous creator named Satoshi Nakamoto, whose identity still remains unknown. Satoshi created BTC with a limit of 21 million in the programming source code, which means that you cannot create or mine any more than this limit into circulation.
When there is a limited supply, increasing demand, it makes the value of the asset scarce, with 18.818 million bitcoin currency in circulation, leaving roughly over 2 million coins left to be mined, and it is said the last Bitcoin to be mined will be around the year 2140.
BTC works fast and is accessible to everyone. They’re private and not regulated by a central authority or a central bank as is the case for traditional currency. Instead, it is decentralized and not owned by any independent party. Thus, allowing anyone to access bitcoin and participate in its exchange.
Anyone with an Internet connection (and, in some cases, without a connection) can use BTC so it is great for people who want to make fast payments at low fees. Users can send coins over this secure network directly to anyone else without traditional financial intermediaries.
How Do Bitcoin Transactions Operate?
BTC transactions are safe and secure – they are almost impossible to modify and alter. They can be purchased or sold via exchanges, digital currency platforms, brokerages, BTC ATMs and even through peer-to-peer networks. These are essentially marketplaces or platforms where cryptocurrency can be bought and sold.
In addition, wallets and cold storage options allow users to store, send, receive BTC with ease and ensure the safety and security of the digital asset going forward. So, it’s best to get your hands on a wallet that has the most features and is secure.
How Is Bitcoin Mined?
Here is another aspect that sets BTC apart from fiat currency. BTC is discovered and not printed the way traditional currency is. They need to be mined and brought to the light by experts known as miners. In this manner, new BTC is entered into the blockchain ledger and brought into circulation. 144 blocks per day are mined on average, with 6.25 BTC per block, in around 9.5 minute intervals, and about 900 Bitcoins mined per day on average.
The underlying blockchain technology is made in a way to maintain the integrity of data and transactions. The blockchain permanently records these transactions through mining. BTC mining refers to the means in which new coins are generated. Mining depends on the Proof of Work (PoW) consensus algorithm and cryptographic hash functions.
Bitcoin vs Gold
BTC has historically been seen as a risky speculative investment for those who want to make short term profits. Gold has always been considered to be a safe-haven asset. There are benefits to both forms of investment. Bitcoin’s value has increased rapidly and will likely continue to increase in the future.
Both BTC and gold are used as means to diversify one’s portfolio, but they are different in many ways. BTC and digital currencies are easily traded on online platforms. The ease of exchange, liquidity and wider use in the economy are some of the main differentiators. Gold is used to hold value in a secure way where Bitcoin can be used for other purposes.
How To Get Started?
If you’re new, then getting on board via a digital currency platform is the way to go. ChainMyne is the perfect fit for you when it comes to investing in digital currencies. Headquartered in Quebec, Canada, ChainMyne has earned its reputation for being reliable and trusted across the globe. We have been certified as a Money Services Business as per FINTRAC guidelines. This makes us the ideal choice for your financial goals.
If you wish to learn more and add on to your BTC 101 knowledge, then get in touch with ChainMyne. Call us and get detailed guidance on where to get started and how from our experienced and highly professional experts.
Make an account and, once approved, get started today. You’re only a few steps away from achieving your financial goals and dreams.