How Bitcoin Works
Even though you might have heard the term at some point in your life, cryptocurrencies have become extremely popular over these last two years, especially after the global pandemic of COVID-19. When the pandemic hit, global economies worldwide shut down, which led to millions of people losing their jobs.
More and more people started to invest in digital currencies to stay financially secure, which made them realize the potential of cryptocurrencies. The astronomical growth of Bitcoin paved the path for the adoption of cryptocurrencies. Bitcoin, also known as the king of cryptocurrencies, was the first-ever digital currency created by Satoshi Nakamoto in 2009.
Back then, it was worth zero dollars. Now it’s valued at around $48,000. But what is bitcoin? We have a simple answer for you!
What Is Bitcoin?
If we talk about Bitcoin from a technical point of view, it’s software that comprises a set of protocols and processes, just like regular programming/coding does. Another way to describe Bitcoin is that it is a digital currency with monetary value, just like conventional money.
It’s based on blockchain technology, allowing it to be a decentralized system, making the transactions secure. Our current banking systems are centralized, which means that the bank has complete control over our money and transactions.
How Does It Work?
Blockchains make the use of Bitcoins possible. As the name suggests, these are blocks chained together that keep track of transactions and keep them secured. People store cryptocurrencies or Bitcoins in a crypto wallet and can send or receive them through various platforms and applications.
Other important elements that allow Bitcoin to function other than blockchains are mining, halving, keys, and wallets. Just like we use mining to extract minerals, so does Bitcoin, but through powerful computers. These miners reward Bitcoins for their efforts, and that’s why these coins are halved or burned every four years. This keeps the inflation rate in control.
There are two types of keys; Public and Private Keys. These are similar to passcodes and keep transactions secured for the sender and the user. Digital wallets work just like regular wallets that store digital currency. However, we need crypto exchanges that allow consumers to trade cryptocurrencies to make the transactions possible.
Are You Interested To Learn More About Bitcoin?
People who want to learn more about Bitcoin can visit Urban Crypto. We are a platform that offers information and simplified crypto and bitcoin guides that enable people to make money online with Bitcoin.
Get in touch with us and download our E-book to learn more about wallets and exchanges to invest in.
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