What is Bitcoin?
Bitcoin is a new type of digital money and, just like with all money, you can store it, exchange it, and make payments with it. The key to what makes Bitcoin different from national currencies like the US Dollar, the Euro or the Japanese Yen lies in its decentralized structure and opt-in model. What does that mean?
With centralized 'fiat money' (literally money by decree), currency is issued by central banks, and citizens are forced to use the money of their nation. With the exception of cash (which is becoming increasingly rare), transactions are made through intermediaries like banks and payment gateways.
Bitcoin, by contrast, is an opt-in currency that is controlled by the 'consensus' or the will of its users. It consists of a growing network of people who voluntarily agree to the rules of the Bitcoin protocol. They use decentralized infrastructure to make transactions on a peer-to-peer basis and to store value independently of any government, company, or financial institution. There's no need to ask for permission to use Bitcoin, and there's no risk of being cut off from the system.
Importantly, the system itself is headless and distributed globally, making it both resistant to corruption and extremely durable.
What gives Bitcoin value?
Bitcoin has value for two key reasons:
- Thanks to its features, some people find it useful as a way to store and exchange value.
- Because a group of people agree it has value.
Historically, people have used everything from seashells to bottle caps as money, but arguably the most enduring form of money is gold. Why?
People settled on gold thanks to its rarity, its durability, and its divisibility. These features made gold useful as a method for storing and exchanging value.
Bitcoin is often compared to gold because it has similar characteristics. Namely:
- It has a limited supply. There will only ever be 21 million bitcoins.
- It's easily divisible. You can divide one bitcoin into 100 million pieces.
- It's durable. A huge globally distributed network of independently operated computers tracks Bitcoin ownership. This ensures that no bitcoin is lost.
Beyond this, Bitcoin has a few other important features which allow it to bring gold's monetary properties to the modern digital era. These are:
- It's easy to send bitcoin. Sending any amount of bitcoin to anyone in the world can be done in minutes and with a 100% guarantee of security. It's almost like sending an encrypted email.
- It's easy to verify the authenticity of bitcoin. Actually, it's effectively impossible to transact with fake bitcoin.
Thanks to the utility of gold, the gold 'network' - to use a modern term - grew over time until gold became almost universally accepted as having value. Although Bitcoin, which started in 2009, is much newer than gold, Bitcoin's network efforts benefit from the scale and speed of the modern Internet. The number of people who place value in Bitcoin has grown at an exponential pace since inception to the point that Bitcoin's value is now closing in on gold's - and that may be just the beginning.
People Also Ask: Other Questions About Bitcoin
How Many Bitcoins Are There?
Bitcoin has a circulating supply of 18,832,712 BTC and a maximum supply of 21,000,000 (21 Million) BTC tokens.
What is the All-Time High and All-Time Low of BTC?
Bitcoin's all-time high and low prices are driven by its supply and demand dynamics. High demand and limited supply lead to price increases, while low demand and excess supply lead to price drops. Bitcoin reached an all-time high price of $69,044 in November 2021. The all-time low price of Bitcoin was $67.81, which was recorded on Jul 06, 2013.
How is the Bitcoin Price Determined?
The price of Bitcoin is determined by the market forces of supply and demand on cryptocurrency exchanges. Changes in demand are influenced by various factors such as news, adoption, regulations, and investor sentiment. These factors can cause the price to fluctuate up or down.
How to buy Bitcoin？
Wondering how to buy BTC? The process has never been easier! You can easily buy BTC tokens on BitMake by following our guide through this link.