Bitcoin is a digital currency created in 2009 that uses decentralized technology for secure payments and storing money that doesn’t require banks or people’s names. Much in the way email improved communication by making it fast and cheap, bitcoin is an improvement on existing payment methods for the internet era. Due to the cryptographic nature of the Bitcoin network, Bitcoin payments are fundamentally more secure than standard debit/credit card transactions. When making a Bitcoin payment, no sensitive information is required to be sent over the internet. There is a very low risk of your financial information being compromised, or having your identity stolen.

How Does It Work?

Bitcoin works on a public ledger called Blockchain, which holds a decentralized record of all transactions that are updated and held by all users of the network. To create bitcoins, users must generate blocks on the network. Each block is created cryptographically by harnessing users’ computer power and is then added to the Blockchain, letting users earn by keeping the network running. A limit for how many bitcoins can be created is built into the system so the value can’t be diluted. Bitcoin is like cash, in that transactions cannot be reversed by the sender. In comparison, credit card, popular online payment systems, and banking transactions can be reversed after the payment has been made – sometimes months after the initial transaction.

What Is It Used For?

Bitcoin has a range of uses, including funding companies, investing cash and transferring money with very minimal fees. Unlike credit card networks like Visa and payment processors like PayPal, Bitcoin is not owned by an individual or company. Bitcoin is the world’s first completely open payment network which anyone with an internet connection can participate in. Bitcoin was designed to be used on the internet and doesn’t depend on banks or private companies to process transactions.

Why Does It Change Value?

Bitcoin is traded for dollars, euros, yen, and other currencies in real time 24 hours a day. Depending on the demand for buying or selling bitcoin, the price can fluctuate from day to day. This is similar to the manner in which the value of a stock or property can go up or down based on supply and demand. Bitcoin’s value can be volatile compared to traditional currencies such as the US dollar because it is still an emerging technology.

Should I Invest In Bitcoin?

Bitcoin is safeguarded against fraud and theft through an independent and decentralized setup, as well as being free from huge transaction fees. It has also given great returns to some investors, and many have become millionaires thanks to Bitcoin.