What is Bitcoin? Everything You Need to Know.

Have you heard about Bitcoin before? Do you have a Bitcoin wallet? If you had no idea or have heard but not sure what it is exactly, keep on reading. For a while now, there have been lots of talks about Bitcoin. From Bitcoin investments to sales to mining and everything in between. So many still do not understand what it is about or how it works. For some, it sounds all techy and should be avoided. For others, it is one of those Ponzi schemes that will crash someday. Just last week the news broke about Bitcoin reaching $4000 per coin (the highest ever!). Yes, I know what you are thinking. That is a lot of money to be equivalent to a ‘coin’. I will be sharing a bit about Bitcoin and possibly you pick interest to invest in it too. Bear in mind that it is no Ponzi or scam, you just have to understand how it works.

What is Bitcoin?

There have been multiple attempts to create a digital alternative to the usual paper currency. Bitcoin is a cryptocurrency that is used in trade exchange online. It is not a physical currency like the dollars or naira but is used for trading on the internet (digital trade). It is free of all government oversight because it is monitored by a peer-to-peer internet protocol. In simple terms, Bitcoin is money that you can not touch or carry around but you can buy and sell still, simply with the internet.

Bitcoin was created in 2009 by a Satoshi Nakamoto, a software developer. In truth, no one is still certain whether it is an individual or group that goes by that name. There is no face pinned to the name either.

How does it work?

Bitcoins are generated by using a free application called Bitcoin miner. The technicality behind the creation is a combination of computer processing power (CPU) and complex algorithms… and you have Bitcoin. With Bitcoin, you create a mine and generate a Bitcoin wallet, buy Bitcoin and store till you either want to resell or purchase an item. Bitcoin became the first viable option to come to life before others started springing up. Examples of other cryptocurrency include Ethereum, Ripple, Litecoin, etc…

What makes Bitcoin so important and different from the conventional money we are used to is the fact that it is decentralized. What this means is that no single institution controls the Bitcoin network, unlike other known currencies. For instance, the dollar is controlled by the United States Federal Reserves and the naira is controlled by the Central Bank of Nigeria. This means that a “big bank” somewhere isn’t in control of your money. It is in your direct charge and eliminates the middleman (bank) in handling your money.

What is it used for?

Bitcoin is used to buy and sell virtually everything on the internet today. Although it is generally not in line with government policies yet, it is accepted in some countries for major purchases and sales. You can spend your Bitcoin on a boutique tour, alcohol, restaurants, order pizza, clothes, and dresses, whatever you wish to. You can swap your coins for dollars or nairas or other currencies. One can buy or sell bitcoins on coinbase. It is the biggest platform right now. In Nigeria, it is Luno that is heading the game.

What is the future of the cryptocurrency like Bitcoin?

The market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerge, old die, those who got hold of it early get wealthy and investors lose money. Every cryptocurrency comes with a promise, mostly a big story to turn the world around.(like most things tech…).

Few survive the first months, and most are pumped and dumped by speculators and live on as dumb coins until the last holder loses hope ever to see a return on his investment. But over the years, there has been a consistent growth in value of Bitcoins with a few drops in value every now and then. It is still the strongest and gives hope of totally changing the future of currencies in the world.

As Bitcoin currently hit $4000 for a coin, it shows that there is no going back on the growth. Though it is an unsure investment, makes it the better risk to invest.

This is basically a starter to get you updated on Bitcoins. So tell me, wht do you think about Bitcoins. Did you invest at all, did you lose or earn money, will you invest at all in it? Share with us in the comment section.

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Chioma Nwankwo

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