The Bitcoin Story
Once upon a time, the government exercised control over all currency affairs. Right from designating value to deciding how much more money to print, everything was done by our beloved government. In 2008, the government screwed up and the market crumbled like a house of cards. And then bitcoin was born. A rebel. A misfit. A completely autonomous digital currency. One which disregarded the idea of leaving power in the hands of a chosen few. And guess what? Since then, It’s grown faster than any asset ever in the history of finance.
What is bitcoin seriously?
Bitcoin is the world’s first digital currency. To put it simply, Bitcoin is created and held over the internet. No single entity controls it which means it is completely decentralized. It is the opposite of paper currency which is a centralized in nature because it is controlled by the government.
How does it work if no one controls it?
The bitcoin network is simply a program which is supported by a community of people called miners. Miners contribute processing power to the network and are rewarded in bitcoins for the same. This is how bitcoins are created. Miners are the ones who make bitcoin transactions possible over the network by making their processing power accessible to the network. These miners don’t belong to a specially chosen group of privileged people. Anyone, including you, can become a miner and join the mining network.
Who invented Bitcoin?
Well, who invented Bitcoin is a mystery the world is yet to solve. The idea of Bitcoin was proposed in a white paper published by a developer or a group of developers under the pseudo name Satoshi Nakamoto. One of the most astounding facts about Satoshi Nakamoto is that he is the owner of around 1 million bitcoins. He was one of the first miners to contribute to the network and accumulated his bitcoins in that manner. Surprisingly, he has never sold any of his bitcoins
What main qualities make it different from paper money?
1. Limited Quantity
When it comes to paper money, the quantity keeps growing stupendously with more and more money being printed each year. This regular printing of paper money makes it inflationary in nature. With bitcoins, the number of coins that will be created is limited to 21 billion. This nature of bitcoins makes them deflationary and hence it is widely regarded as digital gold.
Bitcoins are stored in virtual addresses which aren’t linked to a name, address and other personal information. However, most bitcoin exchanges demand identity verification making the anonymity feature redundant.
Paper money is centralized because the control lies in the hands of a central authority. Since Bitcoin doesn’t have an owner, it is decentralized in nature.
Now, that you know what is bitcoin and understand the basic functioning of bitcoins, you can check out how to buy bitcoin.