Bitcoin explained

What is Bitcoin?

Bitcoin is a digital currency that one can buy, sell and exchange directly, without the help of any intermediary administration. Bitcoin is a decentralized digital form of money that isn't backed by any physical or any paper based money, it's completely virtual; means everything is done on the internet. Bitcoin uses peer-to-peer technology to operate with no central authority or banks. The managing of transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source, its design is public. It is termed as decentralized because any person or any organization can not control it. 

Yeah, it is the first ever digital currency. 

The Bitcoin software was first released in January 2009 but the domain name bitcoin.org was registered on 18 August, 2008 by a person named Satoshi Nakamoto. Who is Satoshi Nakamoto? nobody knows. If you get to know the real identity of him please inform me through my email given the Contact Us section. Satoshi Nakamoto made Bitcoin software open-source code, published the Bitcoin whitepaper and mined the initial Bitcoins. What is open-source code, what is whitepaper and what is mining; we'll discuss them later in different articles. Satoshi Nakamoto, in order to make bitcoin possible, also indirectly made the first practical blockchain and opened a new field with huge potentials; blockchain, a technology that has the potential to change the future. He silently opened a trillion dollar industry. Satoshi Nakamoto initially mined millions of Bitcoins but never used them.

There was a dialogue like "One ring to rule them all" in the "Lord of the Rings" movie, that is also applicable in here with a small modification to it. Here it is like "One coin to rule them all". There are thousands of cryptocurrencies in the world, but Bitcoin is the first and mostly known cryptocurrency out of them. It's market cap is more than 40% of the total market cap of all the cryptocurrencies. One bitcoin is valued at roughly 35,000$ by making it's market cap nearly at 672 billion dollars at the time of writing this. There are only 21 million bitcoins that can be mined and out of this 21 million bitcoins, slightly more than 18 million bitcoins have already been mined to this date. If you had bought only 1000$ bitcoins back in 2010 and held them till this date, you may have become a multi-millionaire by now.

How does it work?

Bitcoin is a fixed asset because there are only 21 million coins. Solving the advanced mathematical problems results in the mining of bitcoins. However, Bitcoin is divisible so the growth potential for the exchange medium is unlimited. One of the most interesting inventions that came alongside bitcoin is blockchain or distributed ledger technology (DLT). You can have Bitcoin by simply buying them in crypto exchanges and holding them in your wallet. You can send bitcoins to others and receive bitcoins from others directly in your wallet. Every wallet has it's own unique wallet address and transactions are made using those wallet addresses, it's fast secure, instant and less expensive than traditional processes.

Bitcoin Mining

Mining is a record-keeping service done through the use of computer processing power. Miners keep the blockchain consistent, complete, and unalterable by repeatedly grouping newly broadcast transactions into a block, which is then broadcast to the network and verified by recipient nodes. Bitcoin mining is the process by which bitcoins are released into circulation. Generally, mining requires the solving of computationally difficult puzzles in order to discover a new block, which is added to the blockchain. Bitcoin mining adds and verifies transaction records across the network. For adding blocks to the blockchain, miners are rewarded with a few bitcoins; the reward is halved every 210,000 blocks.

How to make money from Bitcoin?

There are quite a lot of ways to make money from bitcoin. We'll discuss some of them here.

I've explained what is mining before. You've understood how to make coins by mining. So I'll not discuss about it more, but it's the prime way of making money from bitcoin but as mining of bitcoin need very sophisticated computing devices, so it's not so easy for individuals to make money from bitcoin by mining. So, we'll discuss the other ways to make money in it.

The first way to make money from bitcoin is by investing and holding it; investing for long term. Holding bitcoin is quite easy as the value of bitcoin always goes up in the long term. Do some research on your own and basing on your researches invest in it or not. You can hold bitcoin for weeks, months and years.

Like stocks you could also make money here by trading. Trading simply involves buying and selling bitcoins for the short term; it could be for hours, days or weeks. Many people are making a living by trading bitcoin and some other cryptocurrencies like it. Day trading is quite dangerous for beginners, I would suggest you to stay away from it until you gain proper knowledge.

People also make money in bitcoin by staking them on crypto exchanges. Many top global exchanges provide the facility to stake bitcoin on their exchange and in return give some interests to people on their staked amounts.

Why so Valuable?

There are lots of things other than money which we consider valuable, for example gold and diamond. So is bitcoin in modern days. People use bitcoin as a hedge against inflation during the times of economic uncertainties. Nowadays it has become store of value. Bitcoins are valuable because people can also use them to exchange for real goods and services, and even cash. It has become the modern day gold or in simple words 'Digital gold'. I think Bitcoin has to play a very huge role in days to come. 

Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks. Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime.

Conclusion

In conclusion, Bitcoin is a decentralized digital currency that has been around for more than a decade. It is the first and most well-known cryptocurrency, and it has paved the way for thousands of other digital assets. Bitcoin has a decentralized ledger technology called blockchain, which allows for secure and transparent transactions without the need for a central intermediary. Despite its volatility, Bitcoin has proven to be a store of value and a potential hedge against inflation. It's important to note that investing in Bitcoin or any other cryptocurrency carries risk and it's crucial to do your own research and consider your own risk tolerance before investing. As the world becomes more digital, the adoption and use of Bitcoin and other cryptocurrencies will likely continue to grow. The future of Bitcoin and the impact it will have on the global financial system is yet to be seen, but it is certain that it will continue to be a topic of conversation for years to come.