For those who are still a little confused about how Bitcoin works.
Bitcoin is the name of the world’s first decentralized digital currency. This new type of payment system works by recording every single transaction onto a public virtual ledger called a “blockchain”.
This ledger/blockchain is stored in thousands of computers all over the world making it virtually impossible to hack or alter as there are thousands of copies in existence at all times. This also means that no person, entity, government, organization or company control bitcoins or the blockchain. There is no third party involved with bitcoin transactions, just you and the recipient.
How does bitcoin have value?
Bitcoin doesn’t have a physical value like gold or silver, nor is it granted legal tender by the government like dollar bills so how does it have value? The simple answer is because people themselves have given it value by accepting it as a form of currency. People trade and accept bitcoin as if it was paper money.
Ok… but why do people love it so much?
There are many reasons why this payment system gains more and more popularity everyday.
It’s decentralized – the bitcoin network was designed to be decentralized meaning no person, company, organization, or government can control it. The network is made up by the thousands and thousands of computers that mine bitcoins or make transactions making it impossible for anyone to control the network or take peoples bitcoins away from them.
It’s anonymous – although its not 100% anonymous, it’s pretty damn close. People can own multiple wallet addresses and they aren’t linked to names or any type of personally identifying information.
It’s easy to set up – you can set up a wallet within minutes, no questions asked.
It’s super fast – You can send millions of dollars from a tent in Iceland to someone in Australia within minutes.
Bitcoin is not the only digital currency anymore. As of December 2017, there are about 1368 different types of digital coins. Any coin that is an alternate to bitcoin is considered an “altcoin” (Alternative coin)
These Altcoins also hold value and are constantly traded and sold everyday.