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Blog News What is Bitcoin?

What is Bitcoin?

by Beth Farrell | Earn money online, mobile, News, Reviews

When scrolling through social media, you’ve probably noticed a lot of content surrounding Bitcoin, NFTs, Dogecoin and all kinds of other cryptocurrencies and money-making schemes, but what are they?

In this post we will focus on Bitcoin and explore what it is, why people are investing and how it started.

 

To begin, let’s talk about the basics:

Bitcoin is a digital currency which was released 14 years ago. This online currency operates free of any central control and has no oversights of any banks or governments. 

The original purpose of Bitcoin was for internet users to send money online, just like any other transaction process like PayPal or bank payment, but free from any central control. 

 

So, what is it worth?

At the very beginning of Bitcoin’s launch, 1 BTC (Bitcoin) was equivalent to about £0.073. Of course, at that time, not many people knew of its existence or the potential power it had. As of right now, 1 BTC is equal to £25429.36, so if you did happen to invest in Bitcoin 14 years ago, you should probably go and check on it because you might be rich!

 

Photo: Sajad Nori (Unsplash)

 

Can you turn Bitcoin into cash?

Yes, but not through Bitcoin themselves. There are many cryptocurrency exchanges online where people can turn their ‘internet money’ into real cash, but transactions can also be carried out in person or over any communications platform. It’s probably easier to just buy things with your cryptocurrency though. 

 

How does it work?

In total, there is a hard limit of 21 million coins, the equivalent of £533,337,519,960 (as of right now, May 10, 2022). There will never be more coins available and it is expected that all coins will be in circulation by 2140. In order to extend their reign, Bitcoin’s software makes it twice as difficult to mine Bitcoin every four years by reducing the size of rewards.

 

What is mining?

Mining is the process that keeps Bitcoin alive and how new coins are made available. In order to create new Bitcoin, through the mining process, extremely complicated mathematical problems must be solved that verify transactions in the currency. These are done by using networks of specialised computers. It’s a very costly and complicated process.

 

Should I invest in Bitcoin?

Nobody can answer that for you. Investing in Bitcoin takes a lot of research, the market for it is forever changing and so there will never be a certain answer. Most people who are ‘in the know’, regarding cryptocurrency, say you should never spend your life savings on it, and only use disposable income that you can afford to lose.

It’s also important to note just how much investing would cost you. If you were willing to invest £100 into Bitcoin right now, that would secure you just 0.000039BTC. 

 

So, what are your opinions on cryptocurrency? Will you be investing or would you rather keep your money in the bank? Let us know in the comments.