What is Bitcoin?
I am sure by now you have heard about bitcoin, in fact you probably would not be reading this if you were not curious about it. So I am going to try and give you an simplified version of what Bitcoin is, and what it can do for YOU!
Bitcoin is known as a cryptocurrency. Think of it as money that you can not touch, it is only available online. It is stored in “virtual wallets” much like you store your own currency in your physical wallet.
So If I had 1 bitcoin, it would be stored in a virtual wallet somewhere (there are plenty of places to store it)
Bitcoin is mined much like gold is mined But the method of mining is very very different.
Bitcoin is mined by servers, they work on solving some very, very complicated mathematical algorithms, and when they do they are rewarded with bitcoin.
There is a limited supply of bitcoin (limited to 21 million bitcoins) and as we reach the stage of more and more of those being realised, they become tougher and tougher to mine.
The limited supply helps give bitcoin some of its value, if bitcoin had an unlimited supply then obviously bitcoin would never gain value, we will talk more about what effects Bitcoin value later!
What is bitcoin used for?
In short, everything…
It can be used in exactly the same way as real money, as long as the person receiving the money accepts bitcoin.
You can buy a lot of goods and services online now via bitcoin. I know for one that Lamborghini just opened the doors, and is now accepting BTC payments.. Pretty cool right?
There are even bitcoin ATM’s (there was one 10 minutes away from me and never realised it) where you can buy Bitcoin with cash, and even WITHDRAW real cash from your Bitcoin balance.
Click here to find an Bitcoin ATM close to you!
What are the advantages of bitcoin?
There are many advantages to using bitcoin. It is actually harder to steal than real money (A lot harder) with the right security.
It is decentralised, this basically means no government, bank or entity has single control over the bitcoin infrastructure (the block chain). Bitcoin is basically moved from wallet to wallet by lots of miners confirming the transactions so there is no need for banks to even get involved, in fact some banks are working with the technology behind bitcoin and other currencies.
Bitcoin also has very very low transaction fees compared with pretty much all other forms of payment (even cash has a fee when you pay it into the bank). There is pretty much nothing that can compare to cost savings of bitcoin, and these savings ultimately go to the consumer.
You can also send money anywhere in the world, at any time! Banks make this very hard and with large fees, as well as not operating as efficiently during national holidays.
There are many advantages to bitcoin and this is why you would have heard of it, there are a lot more advantages with bitcoin as well but I believe these to be the biggest!
How popular is bitcoin?
Bitcoin is still in a speculative stage, meaning people are buying into bitcoin more on the speculation that the price will rise than to actually use it to buy goods and services.
Most people agree that bitcoin is going to become very widespread. In Asia most places now accept bitcoin and their are even financial institutions basing their system on the technology behind Bitcoins.
In short, Bitcoin and cryptocurrencies are here to stay, and will grow exponentially in the future!
So in short Bitcoin has many advantages but it does have its disadvantages too. The main one being it is so little known and new, that people will have to put aside their worries and concerns and put some trust into bitcoin!