Although bitcoin has been around for almost a decade now, it still represents a mystery of sorts in the business circles all over the world. It’s been said that it’s “the future of money”, that it will change the global financial system as we know it, and yet, a lot of people are still unsure of what it actually represents and how it works.
They might be familiar with the term, but don’t know the meaning behind it. And seeing that bitcoin is the rising star in the world of technology and finance, it might not be such a bad idea to figure it out, once and for all.
Bitcoin Stands for Decentralization
Back in 2009, Satoshi Nakamoto (which is actually an alias) came up with the idea of a “new electronic cash system”, whose whole purpose was to remove the need for banks and governments in transactions.
That cash system was bitcoin and it was the world’s first cryptocurrency. What made it different from traditional money was the fact that it was decentralized (no intermediaries) and that it didn’t need to be printed—simply produced digitally using a special software.
It’s Based on a Peer-to-Peer Technology
Or, rather, blockchain. Here’s how it works: whenever you send bitcoin to another member or use it to buy goods, everyone else in the network receives a copy of your transaction. After that, all members need to verify your transaction in order for it to be approved, and that right there is what makes bitcoin both decentralized and verifiable.
Unlike government-controlled systems (whose databases are often misused and altered), bitcoin is driven by consensus, which makes your transactions completely secure and not vulnerable to fraud.
Where to Buy Bitcoin and How to Store It
If you decide that you want to buy bitcoin and use it for your purchases in the future, then you might want to find one of the many digital currency exchanges out there, i.e. places where people buy and sell their bitcoins. In order to store them, you’re going to need to use digital wallets—what you want to remember here is that these wallets do not actually hold your bitcoins. Instead, they are a place that hold a private key (which unlocks your funds) and a public key (which has your address in this wide network).
There’s no denying the fact that bitcoin is the most popular and largest cryptocurrency today and it will have a huge impact on the global economy in the future. With this in mind, we have created the infographic below, to help you learn more about it and its importance.
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Featured image by Cave