- Price$ 42,454.00
- Marketcap$ 804.59 B
Want to cash in on crypto? In this article, we’re sharing everything you need to know about Bitcoin, including its price, network security, and store of value.
If you’re thinking of breaking into the cryptocurrency market, Bitcoin is a great digital currency to start with. But before you do, do you find yourself asking how Bitcoin came about, what it is, and its security as a store of value?
These are all good questions, which we’ll answer for you here.
By the time you’ve finished reading, you’ll feel confident in your knowledge about Bitcoin and will be able to make an educated decision on whether to invest.
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What is Bitcoin (BTC)?
Bitcoin is a digital, decentralized cryptocurrency that relies on no central monetary authority. Rather, it utilizes a peer-to-peer computer network to keep track of all BTC transactions and add new bitcoins to the mix through something we call “mining.”
Bitcoin needs no international exchange rates, doesn’t require a middleman like a bank, and all bitcoin transactions and users are anonymous, using pseudonyms rather than real information.
The software that bitcoin relies on to create bitcoins, track their transactions, and exchange the currency is open-source, meaning anyone can use it, any time. Since Bitcoin is digital, there are no real bills or coins associated with it.
The currency is only available in digital format, which is kept track of by blockchains, progressively growing records that offer total insight into every bitcoin’s history.
That means every time it is exchanged or spent; the data is tracked. This is hard to imagine in terms of the paper money we’re used to, but it would be akin to using dollar bill serial numbers to see every path it took to make its way to you.
Bitcoin is not technically a legal tender, though it has gained incredible popularity as of late due to its attractiveness and low fees.
Bitcoin itself spurred the creation and development of countless other cryptocurrencies, which some refer to as a group as altcoins. These would include Dogecoin, Litecoin, and so on.
However, Bitcoin was the very first cryptocurrency, setting the stage for what would come.
Who Are the Founders of Bitcoin?
Bitcoin was originally founded by Satoshi Nakamoto, which may be an individual or a group of people. It all started back in 2009, just after the global financial market nearly collapsed.
Just then, Nakamoto posted an online brief around the idea of a digital, decentralized currency that needs no interference from financial institutions or government bodies.
Whether a person or a group, Nakamoto developed its online bookkeeping platform to track transactions and mine the very first Bitcoins in existence.
Nakamoto’s last public communication was back in April 2011, just two years after his cryptocurrency network was born. Nakamoto, as a figure, is important to Bitcoin, as he (or they) is the founder.
To this day, Bitcoin wallets associated with his name are valued at about $6.2 billion (980k Bitcoin). With only 21 million Bitcoin available to mined total, the founder’s holdings may influence the Bitcoin price drastically should they get traded.
Many people have tried to determine who exactly Nakamoto is, but he’s remained elusive through the years. Still, there are three people that many suspect to be him, or part of the team that is Nakamoto.
The next is Craig Wright, an Australian statistical scientist. Another publication, Wired Mag, claimed Wright to be the true founder back in 2015, though the evidence of his involvement is unclear.
The third is Nick Szabo, a legal scholar and computer engineer who created his own decentralized currency back in 2008 called Bit Gold, which was highly similar to the concept of Bitcoin. Szabo had an entire book written about him as the creator of Bitcoin.
Still, no one knows who started Bitcoin, which gives the cryptocurrency an additional allure.
How Much Bitcoin is in Circulation?
Find more statistics at Statista
As of the time we’re writing this article; there are currently over 18 million mined bitcoins. That’s 18,720,531.25 Bitcoins, to be exact.
However, this number changes about every ten minutes as people mine new blocks and uncover new coins. Currently, each new block of a blockchain adds 6.25 bitcoins into existence.
There are only 21 million bitcoins that could exist, ever. Which means time (and Bitcoins) are running out. This leaves just 2,279,468.8 Bitcoins still available.
How are new Bitcoins discovered? Through mining, which has nothing to do with minerals, and everything to do with major computing power. Mining is similar to digging for gold, just in a digital sense.
Since any one authority body does not centrally regulate Bitcoin, anyone can mine for these coins.
Miners must use highly specialized software to solve complex math problems and algorithms, which requires a computer to correctly guess a unique combination of 64 different digits, which adds up to 2^160 possibilities, a number far too large to depict with a few numerals.
Once all of the Bitcoins are mined, there will be none left. All we’ll be able to do is buy, sell, or trade them.
How is Bitcoin Network Secured?
Bitcoin’s network of blockchain has made it highly secure and incredibly resilient in its 10+ years of existence. There are several ways it keeps its transactions and data safe.
First, new blocks are stored chronologically and linearly, so they always get added to the end of the chain it’s building upon. Its position is known as its height. At the end of 2020, the chain reached a height of 656,197 blocks.
Once a block’s been added, it’s hard to alter the information in these blocks unless you reach a majority consensus. A block owns its hash, the previous block’s hash, and the previous timestamp.
These hash codes come from highly specialized math functions that translate digital data into a string of letters and numbers. If that string gets changed at all, the hash code changes along with it.
So why is this important to bitcoin security? If a hacker wants to steal everyone’s Bitcoin and alter the blockchain to do so by altering their copy of the string, their string would no longer match anyone else’s.
This hacked version would easily stand out among the rest, making it obvious that it’s a fraud.
To succeed in a hack like this, a hacker would need majority control of the blockchain copies so that this new, altered copy then becomes the new majority. This would also require a ton of money and resources that would be hard to come by.
The likelihood of a successful attack like this is little to none, and it would likely just result in the altered version losing its value, turning what was once a valuable asset into a useless chain.
In short, Bitcoin is irreversible, cryptographic, public, and widely distributed, making it nearly impossible to compromise the network.
What is Bitcoin’s Role as a Store of Value?
For something to be a good store of value, it needs to have scarcity and utility and serve as a medium of exchange.
While we can’t be sure that bitcoin is a secure store of value, it does share a lot of features as something like gold, which is a very solid store of value.
It has a finite number of units, uses a decentralized network that gives holders security as described above, and can hold value and transfer as needed.
Bitcoin vs. Top Coins
Should I Invest in Bitcoin?
Whether or not you invest in Bitcoin is up to you, but it does offer some compelling selling points. Bitcoin is going up in value by the day, and those who bought in early are winning big.
It offers a digital, decentralized form of currency with low fees and requires no involvement by governments or financial institutions.
Want to learn more about low-risk investments as a retiree? Click here to learn how to invest in Bitcoin in your IRA.
I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.