So, what is Bitcoin? Most of you might have asked this question. Succinctly, Bitcoin is a digital decentralized currency; a new kind of money with no central authority such as the Federal Reserve or central banks. You can use it just like real money like US Dollar or British Pound to pay for some goods or services. But unlike these currencies, and like all virtual currencies; it has no physical form and only exists electronically.
Some would define Bitcoin as the virtual currency of the modern generation, but there is more to this digital currency than meets the eye. Here are some of the things you need to know about Bitcoin:
- Bitcoin is anonymous. Unlike other digital currencies, Bitcoin is completely anonymous. How can this be possible? It has no serial number and the Bitcoin network never asks for or collects any of your personal information. This anonymous attribute of Bitcoin makes it very popular among privacy-concerned individuals.
- Bitcoin has no central authority. No single person or organization has the authority to control the Bitcoin protocol, except the software developers who works on improving Bitcoin software. It is a fully independent digital currency, controlled by no one, and backed by all Bitcoin users. Having said this, the potential of the currency’s growth is limitless.
- How Bitcoins are generated? The process of generating bitcoins involves complicated problem solving and requires powerful computing power in order to generate the next batch of bitcoins. This is called “mining”, where Bitcoin miners will solve complex mathematical algorithms and share the solution with the entire network. Miners will then receive 25 BTC in exchange for their services.
- What can I buy with Bitcoins? Technically anything, more and more online shops are accepting bitcoins and there is more to come. There are a lot of ways on how to buy bitcoins. You can almost buy anything such as computers, electronic products, webhosting or even a freelancer for his service. You can also use them to buy credits to play online games such as bitcoin dice.
Although it might seem a little confusing in the beginning, there are lots of answers to the question: “What is bitcoin?” Indeed, this digital currency has a lot to offer. From its anonymous characteristic to the wealth of incredible benefits, it isn’t surprising to know why Bitcoin is considered as the most popular digital currency of this generation.