Bitcoin is the best version of digital currency available today. It is secured by cryptography and is exchanged like currencies. Bitcoin is the first established cryptocurrency that was created in 2009 by an anonymous individual named Satoshi Nakamoto. The goal was to start a new electronic cash system with was decentralize and hence free from the control of a central authority or server.
Bitcoin uses blockchain technology and encrypted keys to facilitate buying and selling among the users of the bitcoin community. The two advantageous aspects of bitcoin are:
- It is decentralised as no government, financial institutions or central authority controls it
- The owners enjoy clear privacy as none of their identifying features are disclosed anywhere.
Bitcoin developers have created 21 million bitcoin of which currently some 16 millions are being released into the bitcoin system. Bitcoin comes to the system by a process called minning.
The mining process powerful energy intensive computers solve an extremely challenging mathematical problem that progressively gets harder over time. Every time a problem is solved, one block of the Bitcoin is processed and the miner is rewarded with a new Bitcoin.
There are other ways to procure Bitcoins. This needs the user to have a Bitcoin wallet which stores, spends and keeps track of their digital money. They are mostly free and are available through many provider. Coinbase is a big player in this field. Bitcoins can also be earned through trading of your regular currency for Bitcoins at ‘Bitcoin exchanges’.