The goal of Bitcoin also known as BTC is to empower people to transact without intermediaries and have full control of their assets.
An unknown person (could also be a group of people!) named Satoshi Nakamoto created a revolutionary currency named Bitcoin.
Bitcoin has created a whirlwind in the financial circuits with its breakthrough concept that was built on blockchain technology. Bitcoin exchanges were the marketplace in which people could buy and sell the new coin using various mainstream and state-recognized currencies.
Cryptocurrency is created with the concept of cryptography, which is a technique of encrypting and decrypting. Cryptocurrency uses peer to peer technology for operating and does not need any custodianship of a central bank or authority to manage transactions. It provides fast p2p transactions with the lowest processing fees. One of the most pivotal points is that anyone and everyone is allowed to own a Bitcoin.
Bitcoin was actually the cryptocurrency for which the Blockchain technology came into existence. So, before we know Bitcoin closely, let us understand what Blockchain is? Blockchain uses the distributed ledger method for managing transaction across a peer to peer network, and various stakeholders verify and confirm the transaction without the need of any controlling authority. Blockchain technology can be sued for voting, payments, trade settlement, etc. Bitcoin is used as a transaction unit or a currency for quantifying transactions and exchanges over a Blockchain.
Let’s understand how Bitcoins are released in the market.
Bitcoin mining is the process through which miners release the coins in circulation in the market. Mining is a highly sophisticated and complex process that happens after one solves the computationally difficult puzzles to find a new block that one can append to a Blockchain. Once a miner adds a block to the Blockchain, the transaction records are added and verified by the users across the network. The miners then get rewarded in the form of Bitcoin for adding to the Blockchain. At every 210000 blocks, the reward is split into half. This is called Bitcoin halving.
Cryptocurrency exchanges are needed to transact and buy Bitcoins using various fiat currencies. It is an online marketplace on which users can buy and/or sell their BTC. If these Bitcoin wants to be converted to various other cryptocurrencies then a conversion fee would have to be paid. Bitcoin is fast becoming a unified cross border payment currency with mainstream financial firms and central banks adopting it.
Cryptocurrency exchanges like Binance are like stock exchanges where users buy and sell Bitcoins and other cryptocurrencies based on the market price. However, unlike the stock exchange, the Cryptocurrency exchanges are 24/7 and 365 days a year.
Bitcoin Wallet is needed to hold the bitcoins which one can use to pay for various services and products across merchants. It is digital storage where the coins are stored safely with the help of private keys that authorizes the payments and access bitcoin addresses.
As the world comprehends cryptocurrencies and Bitcoin more, it can become a global medium for financial transactions. As fancy as it seems, like any other digital asset, Bitcoin comes with its volatility and risks. However, considering the current Bullish run, one may predict that it is going to rule the world.