What is Bitcoin? How does it work?

Bitcoin. You have heard your friends talk about it, seen it posted on Facebook and Twitter, heard about the success stories, and now even your grandma is asking about it. But deep down you still want to know but are too afraid to ask…

What is Bitcoin? How does it work?

There’s something that even the experts don’t want you to know, its a very simple concept that everyone one on earth with access to a smartphone and an internet connection can benefit from. Are you ready?

Bitcoin is a global, decentralized, peer-to-peer payments system with a finite and limited supply of currency Created in 2009 by Satoshi Nakamoto, Bitcoin was a solution to what he saw as a solution to the broken financial system. He saw a world without borders where everyone could transact without banks and government control.

Global: The Bitcoin network is global, touching every country on earth with no borders. With a smartphone or a laptop and an internet connection, you can transact with any other human on the planet in realtime with just a few clicks.

Decentralized: The network is decentralized with thousands of nodes all over the world contributing their computing power to secure the network and move transaction between bitcoin wallets. Called miners, these miners are incentivized to do their valuable work through transaction fees and special rewards unlocked every 10 minutes through solving complex calculations locked within Bitcoin’s source code.

Peer-to-Peer: Peer to Peer transactions mean you are not dealing with a 3rd party such as a bank or a government to move value between people. Your BTC transaction recipient could be across the cafe from you, in the next city or on the other side of the world. Transactions are confirmed in real-time and once written onto the blockchain are irreversible and permanent.

Limited supply: The supply of Bitcoin is limited to 21 million tokens (21,000,000). New bitcoins are added into the circulating supply every 10mins or “block” by miners. As new Bitcoin is unlocked and rewarded, it becomes harder to solve the mathematical equation to claim each “block reward” every 10 minutes. As computing power increases and makes the equation easier to solve, the reward for each “block” is halved every 4 years. This means that every 4 years the equation becomes harder to solve the equation, with half the reward available. This model drives the price discovery for traders and investors to see bitcoin as a long term “Store of Value” similar to Gold.

Bitcoin can be many things to many different people.

Payments: You can use it to transact with people in a truly peer-to-peer fashion without the use of a third party.

Store of Value: Invest for the long term. There is a finite supply and not enough to go around.

Trade on Volatility: Bitcoin is still a volatile digital asset, with volatility comes risks, with risks comes reward. Fully understand before trading.

Emerging Technology: Bitcoin, Blockchain, and Crypto are all apart of a brand new emerging asset class with still yet-unseen possibilities. Don’t just stand by and watch, get involved.

If you liked this article on “What is Bitcoin? How does Bitcoin Work?” then why not look at more of our articles at blog.coinpass.com or join our Facebook group.



Invest, Trade & HODL Bitcoin and other cryptos on the UK’s best crypto trading platform. Visit us at https://www.coinpass.com/ https://www.coinpass.com/en/blog

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Invest, Trade & HODL Bitcoin and other cryptos on the UK’s best crypto trading platform. Visit us at https://www.coinpass.com/ https://www.coinpass.com/en/blog