So, what is bitcoin? Well, it is not an actual coins, it is a cryptocurrency, known to be a digital procedure of payment which is produced by a lot of people around the world. It is allowing peer to peer transactions immediately, around the world, for free or at least at a very low cost.

Photo credit: theaustralian.com.au

Bitcoin was created after some decades of intense research to cryptography by Satoshi Nakamoto, a software developer, who created the algorithm and presented it on the year 2009. However, his real identity is still a mystery up to these days.

Photo credit: cryptocoinsnews.com

The currency is not supported by a perceptible commodity because bitcoins can be traded online that is making them a commodity themselves. It is known to be an open source product which is available to everyone who is known to be a user. All you ever need is an internet access, an email address, and money so you can finally get started.

Where it came from?

It is mined on the circulated computer network of users who run specialized software. The network is solving specific mathematical proofs then searches certain data sequences which produce a certain pattern whenever a BTC algorithm is applied on it. Match gives a bitcoin. It is complex, time consuming, and energy consuming as well.

How does it work?

The internet users are transferring digital assets between each other on the network. There is no known online bank that is involved, but bitcoin was described as internet wide disseminated ledger. Users are buying bitcoin by cash or through selling product or service for it. It files and uses digital currency. Users can sell out the virtual ledgers if they trade it they have to anyone who wants it. Everyone can do this, from anywhere around the world.

Photo credit: bitcoin.org

There are apps for smartphones to conduct the transactions for bitcoin exchanges and bitcoin transaction which are now known in the internet.

How is it appreciated?

Bitcoin is not controlled or held by any financial institution. It is totally decentralized. Not like the money in the real world, it will never be devalued by any banks or governments.

Photo credit: payament.com

The value of a bitcoin lies on the acceptance between the users as a procedure of payment and due to the fact that the supply is limited. The global currency standards fluctuate based on the supply and demand and the market speculation; as more of the people are creating wallets and holding and spending bitcoins; and a lot more businesses are accepting it, the value of a bitcoin is going to rise. Nowadays, the banks are trying to appreciate bitcoin and a lot of investment websites are predicting that the price of it will grow to a lot of thousand dollars for the next few years to come.

Photo credit: media.coindesk.com

Photo credit: ounce.me

Virtual currency isn’t universal yet. However, it already gains acceptance and awareness. Business can decide if they want to try it so they can save on bank fees and credit cards and see if it is helping or perhaps hinders their sales and profitability.