Explaining the Bitcoin Phenomenon in Plain English

Most economic experts define Bitcoin as a new financial paradigm with the potential to change the financial future forever. This article unpacks this new technology in plain English for beginners. Recently, Bitcoin has been all over the news. People from different walks of life are talking about this virtual currency. But what’s the meaning of Bitcoin? Well, Bitcoin is a means of exchanging value. The novel technology on which Satoshi Nakamoto underpinned this digital currency is what makes it stand out from other forms of money.

Explaining the Bitcoin Phenomenon in Plain English

Nevertheless, Bitcoin has unique properties that may enable it to alter the global financial landscape. People have discussed few advents the same way they are talking about Bitcoin. However, most individuals seldom understand this electronic money.

Bitcoin Definition

The first question you might ask if new to this digital currency is, what is Bitcoin? Well, Bitcoin is a form of electronic or virtual money. It’s a cryptocurrency that leverages a computer network and new technology to function. This virtual currency network comprises computers spread across the globe. Ideally, this virtual currency uses blockchain technology to work.

Bitcoin Mining

Initially, people could get Bitcoin through the mining process. Bitcoin mining entails creating bitcoins and entering them into the system. Bitcoin miners validate transactions by solving complex mathematical problems to get new coins as their rewards. However, this process requires significant investments in powerful computers and energy. What’s more, you need specialized skills to mine bitcoins. For these reasons, most people purchase Bitcoin on platforms like bitcoin billionaire using fiat money. With this option, you don’t need to invest time and money to get Bitcoin. You register with the system and then load your account with cash to start buying and trading Bitcoin.

Bitcoin Legality

A common question most people ask is about the legality of Bitcoin. Well, regulatory attitudes are slowly shifting towards virtual currencies like Bitcoin. In most countries, Bitcoin is not a legal tender, but people still use it. That’s because geographical borders can’t limit this virtual currency. For instance, somebody can send or receive bitcoins even when their country doesn’t recognize Bitcoin as a legal tender. Some financial institutions and governments are slowly recognizing Bitcoin and its potential in boosting economic growth. Thus, the legality of this virtual currency varies among countries. Nevertheless, its adoption, acceptance, and usage are increasing globally.

Bitcoin as Money

Satoshi Nakamoto designed Bitcoin to act as a scarce commodity available online only. Since people use Bitcoin as a unit measure and transfer value, it may qualify to serve as money. Essentially, this electronic currency has properties that compare to those of traditional currencies. What’s more, several online vendors allow customers to pay for products and services using Bitcoin. Thus, Bitcoin is already serving as money.

Bitcoin Worth

Bitcoin’s value explains why people use it as an exchange medium. It’s also the reason why people are investing in this digital currency. However, this electronic currency is volatile. That means its value can change within hours. Nevertheless, this virtual currency’s worth has been increasing since its launch, and experts predict that this trend will continue.

Bitcoin Storage

A Bitcoin wallet is necessary when you want to purchase, accept, or send this digital currency. Currently, Bitcoin users have options like desktop, mobile, paper, and hardware wallets. Each option comes with merits and demerits that you should consider when deciding on the storage to use.

Final Thoughts

Bitcoin’s popularity, adoption, acceptance, and usage have been increasing since its launch. And this trend will most likely continue. But before trading or investing in this virtual currency, take your time to study and understand how it works. That way, you’ll avoid losing your hard-earned money using this digital currency.

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