Bitcoin, also known as cryptocurrency, is a decentralized digital currency. It is open-source software, designed for public and hence everyone can take part. The transactions are recorded in a public ledger called a blockchain. Bitcoin was created in 2008 by anonymous person or group developer referred as Satoshi Nakamoto.
Bitcoin tokens or “keys,” which are strings of letters and numbers that are linked by mathematical encryption algorithm which was used to develop them. They were created as a reward but today, it can be exchanged for product, services and other currencies.
How Does Bitcoin Work?
Bitcoin price is one of the first digital currencies to facilitate quick payments. The miners, who are basically the independent individuals or company that keeps the blockchain complete, consistent, unaltered and get involved in Bitcoin network are motivated by rewards and transaction fees paid in bitcoin. New bitcoin is being released at a fixed, but intermittently declining rate, such that the complete supply of bitcoins reaches 21 million. Presently, there are about 3 million bitcoins yet to be mined.
Bitcoin mining is the process of releasing bitcoins into circulation which require solving of complex math problems on bitcoin network. One bitcoin is divisible up to eight decimal places and its smallest unit is referred as a Satoshi. Bitcoin’s price depends on the size of mining network, larger the network, the more difficult and expensive it becomes to produce new bitcoins.
Future Of Bitcoins
Bitcoins are used for various purposes such as gambling, investment and as a mode of payment. Countries are now accepting cryptocurrency as a legal mode transaction, as recently Supreme court of India lifted the ban from using cryptocurrency. Digital currency is going to attract a huge audience in coming years as it may contain risks of credibility, theft or hacks, fraud, taxation and others but it has become a convenient way of transacting across the globe.