Cryptocurrencies are making all the headlines right now, with some analysts predicting that Bitcoin will reach $100,000 in 2022.
What is Bitcoin and how does it work?
The concept of digital money that you use online is not complicated in itself. After all, most of us will be familiar with transferring money from one online bank account to another
Bitcoin is a digital asset that functions like a regular currency with notable differences. Cryptocurrencies are peer-to-peer payment methods, without the banks having to break with every transaction. There is no physical copy of the coins either.
Each bitcoin is generated (or mined) using an encrypted token, which is a string of numbers and letters. The same equation used to generate the code is that it can be "unlocked" (like a virtual key).
Other important points about Bitcoin:
- Cryptocurrencies, such as Bitcoin, Ethereum and Cardano, are a form of payment that uses blockchain technology to send data in cyberspace.
- Every bitcoin must be mined
- It's limited: only 21 million bitcoins can be mined in total
- Cryptocurrencies are “decentralized” in the sense that they are not regulated by a financial authority, such as the government or central banks
- Most platforms will allow you to buy bitcoin using credit cards
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