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What is Bitcoin? - Bitcoin is a relatively new type of currency, just like the euro or the dollar. The main difference is that it's a completely digital currency, also known as a cryptocurrency. It's a piece of computer code that is used as a medium of exchange.

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The mysterious inventor(s) - Bitcoin was invented in 2009 and was the first cryptocurrency. It was created by an unknown cryptographer or group of cryptographers who use the pseudonym Satoshi Nakamoto. Their true identity remains unknown to this day.

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How is Bitcoin used? - Just like any other currency, you can store it in an online wallet like a bank account, exchange it for goods and services, and make payments with it. Unlike other currencies, you can use bitcoins without involving a bank or any other third party.

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Storing Bitcoin - You keep your bitcoins in a digital wallet, which can be accessed through your phone or computer. There is no central bank or organization behind Bitcoin. The currency is used on a peer-to-peer basis without control by any government, company, or financial institution.

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Bitcoin value - The value of Bitcoin is determined by supply and demand, therefore it varies, just like stocks. Current affairs and political changes can also cause the value of Bitcoin to increase or decrease quite abruptly.

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Bitcoin value - The value of a single bitcoin has gone from less than US$1 in 2011 to more than US$68,000 as of November 2021. Those who use Bitcoin hope it will eventually build a solid enough foundation to have a consistent value, more like gold.

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Limit - There is a limit to the number of bitcoins that can exist in the world. According to Bitcoin, there will never be more than 21 million. This limitation helps to secure the value of the existing bitcoins.

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Mining - Mining is the process by which new bitcoins are created and entered into circulation, similar to the process of minting new banknotes. Mining is a painstaking and costly process.

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Energy consumption -

It can only be done using powerful, highly sophisticated hardware, and an extremely complex computational math problem. It requires a large number of powerful computers, which is why bitcoin mining is said to have a high carbon footprint.

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How many bitcoin are there? -

There are currently around 19,639,950 bitcoins in existence. Due to the way the mining system works, the process becomes slower and slower the more bitcoins there are in circulation. It's expected that the limit of 21 million bitcoins won't be reached until the year 2140.

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Buying bitcoins - For the average person wanting to procure a bitcoin, mining is not an option. Instead, they can purchase them at a Bitcoin exchange office. There are several websites that buy and sell bitcoin.

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Buying bitcoins - The price of a single bitcoin is astronomical these days, so luckily you don't have to buy a full one. It's possible to purchase a fraction of a bitcoin.

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Benefits of Bitcoin: less fees - Many users prefer Bitcoin because it exists outside of traditional financial institutions. This means you don't have to pay fees to a bank for storing or transferring your money.

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Benefits of Bitcoin: privacy -

To create a Bitcoin wallet, you don't need to provide the usual personal details like your name and billing address. No personal data is required to store and use this currency, meaning it provides a high level of privacy to its users.

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The dark side - For this reason, Bitcoin is popular on the 'dark web,' where drugs and weapons are traded. The anonymity is naturally appreciated by those involved in illegal activities online.

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Ransom - Bitcoin is also the preferred payment method of online scammers looking for ransom. A common scheme is for the perpetrator to email someone saying they have hacked them and accessed compromising information or photos that they will share if a ransom isn't paid.

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Anonymous but traceable - Although Bitcoin wallets and users are anonymous, the currency’s system of transparency means that all transactions are public and traceable. All criminal transactions can be tracked, even if the user’s identity is unknown. What’s more, anonymity is lost once the user tries to convert their bitcoin into a non-digital currency like the euro or dollar.

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Fraud -

Once data about a Bitcoin transaction is created, it can never be deleted. This is why it's all traceable, and also why most types of fraud are impossible.

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Payment method -

Bitcoin was associated with all sorts of dodgy dealings like black market purchases and ransom scams when it first came into circulation. But these days, it's commonly used in more mainstream commercial transactions.

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Paying with Bitcoin - Some online retailers already accept Bitcoin as a payment method. For example, Microsoft, AT&T, Expedia, and Shopify all allow Bitcoin payments.

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Physical stores - What's more, an increasing number of physical stores and restaurants are equipping themselves for Bitcoin payment. Examples include Starbucks, Home Depot, and Burger King.

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International transfers - Anyone who has tried to send money to another country with a different currency knows that it's complicated, slow, and expensive. International Bitcoin transfers are comparatively cheap and work much faster.

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Remittances -

Bitcoin has become the favored transfer method for many migrants working abroad when it comes to sending money back home to their families. It's quickly overtaking traditional bank transfers and operators like MoneyGram.

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Is Bitcoin taxed? - Each country has its own policy about how Bitcoin payments are taxed. Those using Bitcoin need to do some research and find out how it works in their locale. In some countries, it's totally tax-exempt!

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Bitcoin ATM - Vancouver, in Canada, was the first city to have a Bitcoin ATM, but they can be found all over the world now. You can enter your Bitcoin address at an ATM, put cash in, and you will receive bitcoins in your digital wallet in return.

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Bitcoin ATM -

Although they're much rarer, some Bitcoin ATMs actually allow you to convert your bitcoins into cash.

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Cryptocurrency on the rise - Bitcoin was the first cryptocurrency to be invented, but it was far from the last. Many other companies are trying, and succeeding, in following the Bitcoin model and creating their own cryptocurrencies.

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New cryptocurrencies -

Some of the other cryptocurrencies on the rise include Ripple, Ethernum, Dash, Monero, and Litecoin.

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Dogecoin -

There is even a cryptocurrency called Dogecoin, which features the popular doge meme and was created as a joke. Dogecoin experienced a temporary surge in value when Elon Musk tweeted about it in 2021 (also as a joke). 

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Trouble for Bitcoin? -

The value of Bitcoin reached an all-time high in November 2021, but by January of 2022 its value had decreased by 50%. This drop came after the US Federal Reserve announced a policy change that would impact Bitcoin exchange rates. This just goes to show how volatile the cryptocurrency market can be.

Sources: (Bitcoin) (Investopedia) (Good Returns)

See also: These celebrities all invested in cryptocurrency

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