What Is Bitcoin (BTC)?
If you follow Bitcoin news, you know that Bitcoin has been reaching new and new horizons in recent months since December 2020. On March 13, 2021, the exchange rate reached a historic high of $ 60,000. The main global cryptocurrency, which everyone has definitely heard about now. Let's analyze what you need to know about it, how to get it, and what justifies its value.
Bitcoin is a payment system that uses the eponymous unit of the same name to account for transactions – that is, Bitcoin (BTC). The system is based on blockchain technology. A monetary transaction, the result of which is recorded in the diary, is a transaction. The sequence of records in it (each of which is called a block) is a blockchain. The process of competition p for the selection of a suitable nonce is mining, and the participants themselves are miners. The fee for writing a block is a commission per transaction.
Bitcoin is very similar to gold, which cannot be copied – it can only be mined. But this is a very costly process, both in terms of time and resources. This is one of the reasons why gold is so valuable. However, if people are involved in gold mining, then mining uses the computing power of computers provided by the participants in the transactions. Roughly speaking, there is only one way to get more new BTC: to process more transactions. Miners provide more and more computing power. Because of this, the demand for video cards and for electricity is growing.
Advantages of this digital currency:
- Decentralization. An important feature of Bitcoin that has led to its popularity is the decentralized nature of this payment system. In other words, Bitcoin is not under the control of a state, organization, or individual. The program code is completely open, and the system participants are scattered all over the world. Anyone who wants to join will be able to do so without hindrance.Transaction histories and balances of fiat currency wallets are stored on special servers owned by financial organizations. Such repositories are often hacked, which is quite unpleasant for ordinary users. There is nothing in the Bitcoin system that can control the data. Moreover, all the data in this network is publicly available to absolutely everyone. And you won't be able to change them.
- Anonymity. Unlike traditional financial systems, Bitcoin does not require you to authenticate with your passport data. You are your address in the Bitcoin network. You can get as many addresses as you want. The ability to make financial transactions will only depend on whether you have enough funds in your account. And by the way, anyone can calculate the status of your account, but they can't know anything about you except your transaction history and your wallet address.
- Stability. You can't change a block in the blockchain. This is almost impossible. Otherwise, you would have to change a huge number of records on millions of computers around the world at the same time. Therefore, no transaction can be canceled or replaced with another one.
- Limited issue. Traditional fiat money has unlimited issuance, as central banks can always print as much money as they need. Let us recall the analogy with gold. The more difficult it is to extract gold and the smaller its reserves, the more valuable it is.
This is a mechanism for controlling inflation. In Bitcoin, a similar mechanism is implemented: the system gradually reduces the number of bitcoins produced in total per unit of time. This looks like an inverse proportionality function. And yes, there will come a time when the number of bitcoins in the world will become a constant value. Just like the amount of gold reserves on Earth.
Bitcoin price tends to go up and it's a sign to move. Buying Bitcoin is the simplest operation in the crypto world. This is the main currency that is common on any exchange platform. Therefore, you can choose any one that is most convenient for you. To buy BTC for dollars and to change Bitcoin to USD, we recommend the main platforms, such as:
If you already have another cryptocurrency in your account, but you want to exchange Bitcoin, you can use the faster and completely anonymous Godex exchange platform.
You can also buy Bitcoin directly in the Bitcoin.com Wallet app.
Circulation of Bitcoin
The limit number of BTC coins that will exist in the world is 21 million. It will be impossible to get more than this amount. As we wrote above, this is one of the conditions for creating Bitcoin value. That's why the Bitcoin price is so high. At the moment, about 88.65% of all tokens have been mined and are in circulation. This is approximately 18.6 million BTC. The remaining 11.35% has 120 years to mine. The last block will be mined in 2140.
The rate of Bitcoin emission is sewn into its code and is strictly limited. Every four years, production is halved. In addition, as the graph below shows, it becomes more difficult to find a new block over time.
Can You Mine BTC?
Bitcoin mining requires special equipment with high computing power. And if earlier a relatively powerful computer with a video card was enough for this. Now mining is possible and profitable only when creating entire enterprises or mining farms, as it is commonly called.
In 2020, the bitcoin network passed an important milestone — the third halving, when the reward for miners for the extracted block was halved, from 12.5 BTC to 6.25 BTC. Due to the reduction in the remuneration for mining, the revenue of miners is reduced, and mining enterprises are looking for ways to compensate for the lost profits — they switch to more energy-efficient and powerful equipment, do not sell the extracted bitcoins immediately, but wait for the exchange rate to rise, and so on. Therefore, the strengthening of bitcoin after the third halving was quite expected.