Bitcoin Explained Simply
Here you will find everything you need to know about the world's first cryptocurrency. We will not only discuss the Bitcoin price but also explain why Bitcoin was launched in 2008 and what problems this cryptocurrency solves.
Bitcoin is a digital currency not controlled by any government or institution. There are no physical coins or banknotes; everything is managed online. Bitcoin is essentially a bank-free digital money system. An unknown person or group of people created Bitcoin in 2008 under the pseudonym Satoshi Nakamoto. Nakamoto envisioned a world where people could make electronic payments to each other without using a bank. His vision was to make everyone their own bank and create a system where no intermediaries are needed.
Bitcoin is based on a technology called Blockchain. The Blockchain is a decentralized database that records all Bitcoin transactions. When someone sends Bitcoin to another person, this is recorded and confirmed in the Blockchain. There is no way for Bitcoin to be double-spent or counterfeit, as transactions are public and immutable. By the way, in this article, we have explained the topic of Blockchain simply and understandably.
Bitcoins are created through a process called mining. You can best understand Bitcoin mining by imagining the following: people around the world use computers to solve mathematical puzzles and receive Bitcoin as a reward. These puzzles validate transactions on the Blockchain. There is only a limited number of Bitcoins that can be created, namely 21 million.
The price of Bitcoin is determined by supply and demand. Since there is a limited number of Bitcoins and more and more people are interested in Bitcoin and other cryptocurrencies like Ethereum or Solana, the value of Bitcoin can increase positively. Bitcoin is increasingly referred to as digital gold because it shares many of the same properties as physical gold. Additionally, the acceptance of Bitcoin by businesses and institutions contributes to its value. Just as gold is limited compared to the Swiss Franc, many view Bitcoin as digital gold.
Did you know that each Bitcoin can be divided into 100 million smaller units called Satoshis (or Sats for short)? This means you can also acquire fractions of a Bitcoin in your Bitcoin wallet, in the form of Satoshis. You don't have to ask "What does 1 Bitcoin cost?" to be part of the crypto community.
✅Trust: Bitcoin is decentralized and not controlled by a central authority or institution. This means that no single individual or company can control the network, which increases users' trust in the currency.
✅Non-Manipulable Inflation: Bitcoin is not tied to a and thus is not subject to government-controlled inflation or other economic fluctuations. Bitcoin experiences low inflation during mining (similar to gold). Since the amount of new Bitcoins is halved every four years, also decreases every four years. This makes Bitcoin a stable currency that can be a secure investment option even during economically uncertain times.
✅Financial Inclusion: In many countries, people lack access to traditional banking services due to geographical barriers, high fees, or a lack of trust in banks. Bitcoin offers an alternative way to conduct financial transactions without relying on banks. Anyone with a smartphone or computer and internet access can use Bitcoin, regardless of where they live or how much money they have.
✅Fast Transactions: Bitcoin transactions are usually confirmed and completed within a few minutes. This means you can send and receive money quickly and easily, without having to wait for slow bank processes.
Bitcoin is a revolutionary development in the field of finance and technology. However, there are also challenges, including high volatility and the fact that the currency is not yet globally widespread and is not accepted by many companies and institutions. Nevertheless, Bitcoin remains a promising technology that could play an important role in the future.
The Bitcoin price is determined by the interplay of supply and demand on various trading platforms worldwide. These platforms allow users to buy and sell Bitcoins, with the price being set by the ratio of supply to demand. Factors such as overall confidence in Bitcoin, regulatory developments, technological advancements, macroeconomic events, and even sentiments on social media can all influence the Bitcoin price. Since Bitcoin's value is always compared to a traditional currency, the Bitcoin price in CHF may differ from the Bitcoin price in USD. It can be observed that Bitcoin generally has a higher value in the currency with the higher inflation rate. So, if you want to invest in Bitcoin by buying Bitcoin, you should always keep an eye on the exchange rates of your preferred currency.
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