Bitcoin is the oldest and certainly the most popular cryptocurrency. In this article, we present key facts about Bitcoin, introduce the technology on which it is based and show you how to invest in Bitcoin. Historically, cryptocurrencies were considered something like a lottery ticket. At this point, however, Bitcoin (BTC) and other cryptocurrencies have established themselves and are treated as a full-fledged asset class in investment portfolios. In fact, the “digital revolution” in the current era is reminiscent of the gold rush of the 19th century, with prices plummeting due to the global surge in interest in cryptocurrencies. Therefore, you can ask yourself what cryptocurrencies actually are and how can you take part in the technological boom without specialist IT knowledge?
Key Facts About Bitcoin (BTC) and Other Cryptocurrencies
Bitcoin is a form of digital currency, created and stored electronically. It was founded in 2009 by a man named Satoshi Nakamoto. It was the world’s first virtual payment method of this type. With several important features, it is one of the biggest financial innovations of recent years:
- Safety
Information about transactions carried out with bitcoin is encrypted using a technology called “blockchain”. The way it works and the constant verification seems to be practically unbreakable at the moment.
- Speed
Payments in bitcoin are carried out online. In the process of transferring funds, the distance of the place to which we send money does not matter, and the transaction takes place without intermediaries. 24/7 Availability Bitcoin transfers have no restrictions in the form of days of the week or holidays, we can send funds 24 hours a day, seven days a week. Transactions are approved practically every 10 minutes.
- Low costs
At the moment, in terms of fund transfer costs, bitcoin is considered by some to be a cheaper alternative, in particular for larger amounts. This is due to the lack of intermediation of banks.
- Anonymity
Opening an account in this cryptocurrency has no formal conditions, and the accounts are anonymous. The only thing the user receives for the account is a login consisting of 54 characters and a password.
- Decentralisation
Information about bitcoin account balances can be found in many places on earth in the same form at the same time. It makes it even more secure, for example, compared to traditional banks that have a centralized database system.
- Limited quantity
According to the creators’ assumptions, 21,000,000 bitcoins will be created by the year 2140 (approximately). At the moment (September 29, 2022), 19,163,693 BTC have already been put into circulation (this value changes approximately every 10 minutes), and the pace at which more will hit the market will slow down.
These factors have mainly influenced the popularity of bitcoin, which can be reflected in its market value.
What exactly is Bitcoin?
Bitcoin is a form of digital currency, created and stored electronically. Unlike traditional, physical currencies such as euros or dollars, Bitcoin is not printed, i.e. it does not have a physical form. Instead, bitcoin is created by computer scientists around the world, using programs that solve mathematical problems.
Bitcoin is also a liquid medium of exchange that we can use to pay for an increasing number of things! Every now and then we hear that more institutions, stores, or other companies are starting to accept bitcoin. It is also a currency that has no physical form and can be sent directly to any place on earth in an instant. This has many advantages compared to, for example, international bank transfers, where the money has to go through several banks on the way, and thus be recorded on several consecutive virtual account books.
Another significant difference between cryptocurrencies and physical cash is banks. The mission of the central bank is to stabilize its own currency. It can increase the money supply, which we call “printing,” to cover government debts, thereby devaluing the currency. However, in the case of digital currency, there is no such thing as a Bitcoin Bank that is also its regulator. This is due to the fact that, in its own way, Bitcoin is a bank in its own right. An independent ledger contains information about the ownership status of all users and the history of transactions between them. To open an account with cryptocurrency, you just need to download a special application and generate a login and password. Each user’s account is completely anonymous and has no formal requirements.
At this point, the meaning of the term “crypto” is revealed to us, because the above-mentioned information is encrypted inside bitcoin. The way encryption is done is a revolution in the field of computer science – we are talking about “Blockchain” technology. Translating into Polish, it means “a chain of blocks” that are cryptographically related to each other.