What is Bitcoin? — A brief introduction.
Bitcoin is a decentralized virtual currency which you can store, exchange, and use to make payments. The decentralized nature of bitcoin is its main differentiator from regular fiat currency or paper money controlled by a government or bank.
As a citizen, you don’t have a choice when it comes to what currencies you can use. The country you are born in or have citizenship for has a currency you must use. If you are born in a third world country like Nigeria. It simply means you’ll watch your currency drop in value every year. If you save for the next few years of your life it would never be enough. It’s like trying to fill a bucket with holes.
Bitcoin, however, is an opt-out of the conventional system. We’ll go over what it is, how it works and what you can use it for.
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History of Bitcoin
In 2009, Bitcoin became one of the first cryptocurrencies to be created following the recession in the United States. It was designed to be a decentralized digital currency that utilizes an incredibly secure information recording system that cannot be hacked, edited or changed i.e the blockchain. The economic crisis was when many people lost their money, their homes, and their sense of security. Bitcoin wanted to give people control over an asset that did not have any government or regulatory parties involved. Although it would take years before the public would adopt it in its entirety, it slowly became the powerhouse that we see today.
The identity of the creator(s) of Bitcoin is still unknown to this day, but they are usually known by the name Satoshi Nakamoto.
Why is Bitcoin so valuable?
Historically, we have used different things as a means of exchange. We have tried seashells, stones, and much more.
For centuries, gold became the people’s favorite. Everyone agreed that it was valuable because it was rare, durable, and could be divided into smaller units. This made it worthwhile for exchanges and as a store of value.
Bitcoin has often been referred to as digital gold because it is scarce, durable and divisible.
Scarce: Bitcoin has a limited supply in the market, i.e. 21,000,000(twenty-one million).
Durable: No bitcoin can ever truly be lost. Every bitcoin ever mined or sold is registered on the blockchain.
Divisible: Bitcoin can be bought in small units. You can buy a whole Bitcoin or part of one on ValorExchange for as low as $1. Although, your account isn’t just limited to buying crypto. You can make international transfers, save and make payments all with your account.
If you want to check our tutorial on making international transfers or remittances, then see this article.
Where does Bitcoin come from?
All cryptocurrencies have a system that guides how they operate. Bitcoin uses a proof of work consensus mechanism that guides how new Bitcoin is found and added to the blockchain.
In this mechanism, miners would validate a transaction and the first to do so is given new cryptocurrencies to add to their wallets. If you need a more in depth explanation on how Proof of work operates then visit our previous article.
How do I get Bitcoin?
You can try mining, we’ve written on how to do that. Although, you have to be prepared to invest time and a lot of money into computers, electricity, etc.
If you’re not prepared to do all of that then you could create an account with us. It’s a simple process and you can get started and finished in minutes. On our platform, you can buy Bitcoin, Ether and Tether easily and securely.
Three Uses of Bitcoin
Borderless transfers: This is one of the reasons why we love crypto. There are procedures that you have to follow when it comes to transferring money across countries. On ValorExchange, you can make as many transfers across countries as you want, and if both accounts are on our platform, then the transfers are free.
Purchase of everyday items: There are more stores and organizations now that accept Bitcoin as payment than ever before. The best part is that the numbers keep increasing.
Store of value: Although Bitcoin’s price is volatile, many use it to save up or as a store of value. Unlike fiat currencies, Bitcoin is inflation resistant and has experienced significant growth in price since its introduction to the public.
Bitcoin has grown tremendously and has become a widely adopted and useful cryptocurrency.
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