Bitcoin is a digital currency that was created in 2009 by an unknown person or group using the name Satoshi Nakamoto. Unlike traditional currencies such as dollars, euros or yen, Bitcoin is decentralized, meaning it is not controlled by any government or financial institution. Instead, it is based on a technology called blockchain, which is a public ledger that records all Bitcoin transactions.
So how does Bitcoin work? When someone sends Bitcoin to another person, the transaction is broadcast to the entire network of Bitcoin users. Miners, who are members of the network, compete to validate the transaction by solving a complex mathematical equation. Once the transaction has been validated and added to the blockchain, it is considered irreversible. This decentralized system ensures that Bitcoin transactions are fast and secure, and they do not require any intermediaries, such as banks or payment processors.
One of the main reasons why many people think Bitcoin is important as a stored value is because it has a limited supply. There can only ever be 21 million bitcoins in existence, which makes it resistant to inflation. This is in contrast to traditional currencies, which can be printed by central banks, leading to a decrease in their value over time.
In addition, Bitcoin is not subject to the same regulations and constraints as traditional currencies, which can make it a more attractive investment option for some people. However, it is important to note that Bitcoin is not without its risks. Its value can be volatile, and it has been known to experience significant price swings. In addition, because Bitcoin is not backed by any government or financial institution, it is not insured like traditional bank deposits.
Overall, Bitcoin is an innovative technology that has the potential to revolutionize the way we think about money and value. While it may not be suitable for everyone, it is certainly worth considering as part of a diversified investment portfolio.
Here’s a list of resources you can check yourself, to learn more about bitcoin: