How much bitcoin do you own? That’s the question that everybody is asking these days. Bitcoin and cryptocurrency, in general, seem to be the investment wave of the future.
Even new investors are trying to see how they can get in on the action.
But what is Bitcoin exactly? And how do you get started investing in it?
Well, fortunately for you, that’s exactly what we’re going to cover today. We’ll give you all the basic information you need for understanding bitcoin.
So, stick around. We’ve got a lot to cover. Let’s get going!
What Is Bitcoin?
For those of you that are new to the Bitcoin arena, let’s talk about what exactly Bitcoin is. Bitcoin is a specific type of cryptocurrency. Other major types you may hear about are Ethereum and Dogecoin.
The general name of Bitcoin’s asset class is cryptocurrency. Cryptocurrencies are new monetary systems that are set up on the internet through a technology known as blockchain technology. These currency systems allow people to buy and sell goods and services on the internet while using their cryptocurrency as a form of payment.
A large number of online retailers accept Bitcoin as a viable payment. In fact, certain companies allow you to rent an apartment with cryptocurrency in certain areas of the country.
Understanding bitcoin and how It works
Believe it or not, Bitcoin was not the first attempt at an online currency. However, Bitcoin is the first one that worked for two main reasons. Firstly, Bitcoin is a finite resource and secondly, it’s rare.
Really, when you think about it, the principles are the same as a precious metal like gold. Bitcoin is valuable, just like gold is valuable because they are hard to get and there is only a certain amount available.
So, how do you get Bitcoin? Well, bitcoin and other cryptocurrencies are “mined” by giant supercomputers. These supercomputers are assigned a mathematic puzzle using computer code.
People have set up rooms full of these large computers completely devoted to solving these math problems. And, even with that amount of computer power, these puzzles can take hours or even days to solve.
Once the computers get a solution to the puzzle, that solution is then checked for accuracy. If the solution is verified as accurate, then the owners of that computer receive one bitcoin.
The catch is that there is only a finite number of bitcoins that can be created. And every year that number gets smaller and smaller until eventually all of the available bitcoin has been mined from the internet.
Institutions like Byte Federal can provide more resources on why exactly Bitcoin has its value.
We hope this article taught you everything you need to know about understanding bitcoin. If you’re new to the cryptocurrency space, you’ll be able to understand this new investment vehicle without any confusion. As always, if you need to do further research before investing please do so.
Make sure you completely understand what you’re investing in. What did you think of this topic? Do you have any personal experience investing in Bitcoin? Let us know in the comments below, and let us know if you’d like to see us cover more topics like this one.