Bitcoin has been around for several years, but it is still often misunderstood by those with a limited knowledge of cryptocurrencies. It is different from other currencies in that it is decentralized – in other words it isn’t controlled by any one authority. It also has a finite supply – unlike central banks which can issue as much of a currency as they like.
One of the attractions of bitcoin is its anonymity. When making a transaction using bitcoin, one does not need to identify oneself. However, every transaction is tracked, and checks are made on every customer to ensure they are allowed to buy or sell bitcoin. Also, the network is transparent and everyone can view the progress of transactions being made meaning it would be unwise to use it for criminal activity.
Bitcoin are ‘mined’ using very powerful computers, which work to solve complicated math problems. There are 21 million bitcoin in total, including those in circulation and those waiting to be mined. Each time a computer correctly solves the problem, 12.5 bitcoin are released. This happens around every 10 minutes, so it’s thought that all the coins will be mined by the year 2140.
Bitcoin is not the only cryptocurrency available now, in fact there are new ones emerging all the time. TrulyCoin is a great website where you can keep up to date with the latest advances in digital currencies, and compare their features. Each currency works in slightly different ways, so if you are planning to invest it’s a good idea to do some research first. Make sure you fully understand the digital currency and how it works, and where it can be used. Many retailers still don’t accept bitcoin and other cryptocurrencies, so be sure you will be able to spend it!