The concept of Bitcoin was first proposed in 2008 by a man named Satoshi Nakamoto when he published an article called “Bitcoin: A peer-to-peer Electronic Cash System.”
As a cryptocurrency, Bitcoin has the following characteristics:
· No physical counterpart in the real world
· No central authority to manage its issuance and transaction
· Less of a national credit base than fiat money
· Relies on a “Decentralized Ledger Technology” transfer system
As a result, the transaction process of the Bitcoin system completely depends on users of the system, and not on a single central party (i.e. banks and government)
Bitcoin Versus Cash (Physical Fiat Currencies)
The biggest difference between Bitcoin and traditional transfer methods is that in the past “Banks” verified the accuracy of transfer records, whereas blockchain technology guarantees the validity of transfer records in Bitcoin.
The simplest way to think of blockchain is as a large distributed ledger of sorts that stores records of transactions.
Satoshi Nakamoto proposed the use of mathematical and cryptographic principles to ensure we can transfer bitcoin and maintain these records of transfer without any central authority. These principles form the foundation of today’s entire blockchain market.
How Prices are Determined
The total supply of Bitcoin is fixed at 21 million. Since supply is limited, the more people want to buy, the higher the price will be.
As a cryptocurrency, the value of Bitcoin is completely determined by the public, without any physical basis or institution to maintain price control. This makes the price of Bitcoin fluctuate very violently. Any adverse news will lead to a sudden fall in prices, but at the same time, any favorable news will cause the price of bitcoin to soar.
How Can I Get Some Bitcoin?
There are two ways to get Bitcoins: Mining and Purchasing.
Mining: an incentive mechanism established to allow participants to contribute their computing resources with the Bitcoin network. By sharing your computing power, you will assist in accounting and ensure the security of the whole network. This supports the entire blockchain operation of Bitcoin and helps maintain the decentralized feature of Bitcoin.
Purchase: you may also purchase Bitcoin through a cryptocurrency exchange like Hybex.io or through an over the counter (OTC) platform with another party.
How Can I Send and Receive Bitcoin?
You can send and receive bitcoin using a simple wallet address (similar to an email). You don’t need to go to the bank and withdraw cash, you don’t need to write a check, you don’t even need to do a wire transfer that takes three days or more.
All you need to do is type in the address of the person you want to send bitcoin to, and within seconds or minutes, bitcoin will be transferred to their account. Just like email.
