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Bitcoin is one of many digital currencies, but has become the most well known as it was the first, and is currently the biggest and most valuable. This new breed of digital currency is known as cryptocurrency.
It is entirely digital and there are no physical notes or coins. There is also no central authority, reserve bank or government behind cryptocurrencies and it is controlled entirely by the public through a decentralized peer-to- peer P2P network.
It is important to understand the underlying principles and technology of cryptocurrencies first. However, as history has proven, and almost every day, these existing systems are being attacked, hacked and data is compromised or stolen.
These traditional payment solutions are also expensive. Bitcoin is built with a technology called blockchain which challenges this conventional wisdom and uses a public ledger that records every transaction.
This public ledger is available to anyone within the network. Now, logic says this would be less secure, however because the complete blockchain sits on thousands of computers around the globe, each time a transaction takes place, it gets verified and updates across every node, plus each transaction is encrypted using a complex algorithm i.
In order for the integrity of the data to be compromised, hackers would have to compromise multiple nodes and the encryption simultaneously with precision timing.
This approach to securing data makes this type of technology far more secure than conventional systems, faster and cheaper, and virtually impossible to hack.
The reason that Bitcoin is valuable is a combination of the limited supply 21 million , high demand, excellent security and most importantly, the ability to move value transact across the world, anonymously, direct to someone without the need of intermediaries, such banks, governments or authorities.
The Internet, and transacting over the Internet securely has become an integral part of our lives and now, cryptocurrencies are making all of this possible faster, cheaper and more securely.
Bitcoins can be bought through cryptocurrency exchanges. You will also need a digital wallet to store your cryptocurrency, however many exchanges offer you a free wallet, either accessible via their website or as an App for your phone.
Disclaimer: Before you start using Bitcoin, be sure to read what you need to know about the wallet option of your choice and take appropriate steps to secure your wallet and adopt good practices in order to protect your money.
Disclaimer: The provided information does not construe investment advice and is for informational purposes only.
Be sure to understand the volatility of cryptocurrencies and how to store and secure your cryptocurrencies.
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