Bitcoin has become so popular that every person of every age has heard about it at least several times. However, not everyone understands what exactly it is and how it works. Moreover, a lot of people think that the best way to buy Bitcoin is by exchanging crypto, for example, LTC or BTS to BTC. Is it the best option, though?
Here, we present to you all the information you need to know about Bitcoin, how it works, and how to get it in 2022.
What Is Bitcoin?
The first question you need an answer to is “What is Bitcoin?”. Bitcoin is a decentralized cryptocurrency based on peer-to-peer technology. It was created in 2008 by an anonymous person or a group of people known as Satoshi Nakamoto.
The main reason why Bitcoin is the most popular cryptocurrency is being the first one to appear on the crypto market. Moreover, it didn’t require any third party when making online transactions from person to person.
How Does Bitcoin Work?
Here you can find out how Bitcoin works and how you can use it in everyday life.
Blockchain
Bitcoin has set a trend on how most modern cryptocurrencies operate — via blockchain. BTC blockchain is a decentralized system, where every transaction is confirmed by block validators — miners. For example, when you decide to convert ZEC to BTC, this transaction will be confirmed by other users of the blockchain. In such a manner, Bitcoin can fully operate independently and doesn’t require any centralized entities like banks to verify transactions.
Mining
There are several ways to get BTC. You can buy it from other users or use a crypto faucet. Alternatively, you can mine it. Mining is the process of “releasing” Bitcoins into circulation. In order to mine cryptocoins, you need to solve difficult mathematical equations using the computing power of your device while competing with other miners. The first miner who can solve the task will create a new block. It is also important to mention that mining requires a lot of electricity, so be ready to receive enormous electricity bills.
Currently, there are over 19 million coins already mined out of 21 million. The maximum supply of Bitcoin is limited, which is another factor that can influence its price in the future.
How to Use BTC
If you have got some BTCs and don’t know what to do with them, here are some recommendations:
- As an investment. The price of Bitcoin is volatile. However, many experts think that its price will only increase in the future, reaching new ATHs. With every coin mined, the price per coin increases, as the number of coins available becomes more limited and will reach zero at some point. So, it may be a good idea to buy some Bitcoins as a long-term investment.
- As a means of payment. You can use Bitcoin as a regular currency to buy products online. However, you need to make sure that a shop you want to visit accepts crypto as a payment method.
- As a means of exchange. You can always exchange Bitcoin for other cryptocurrencies that show a better performance than BTC. “Digital gold” is listed on all exchanges, literally.
More to Know About BTC
The Bitcoin network protects data using the SHA-256 encrypting algorithm. Each block has its 256-hexadecimal number, making it extremely difficult to hack it and steal the funds. Still, when it comes to exchanging, you will also have to check how good the protection is there and whether the platform uses an encrypted connection.
In Conclusion
Summing up everything mentioned above, now you know what is Bitcoin, how it operates, and how you can earn it. All you need to do is choose the best method for you. However, we don’t recommend selling BTC for now as reputable sources predict its significant price increase following this bearish run.
