The Popularity of Bitcoin Today, and How it Works

Author: James Johnson

You’ve probably heard about Bitcoin, the enigmatic digital currency that is not secured by gold or silver or by the backing of any bank or authority. 

Although it appears to be based on nothing, you may use it to purchase various goods and services.

What’s strange is that there isn’t a single entity running or controlling Bitcoin; rather, there is merely a network of computers that anybody can join.

Those computers follow a set of rules to process and record transactions. This process is known as mining. However, you don’t have to be a miner to own Bitcoin or a fraction of it. 

How Do You Use Bitcoin?

Take the example of a restaurant owner who is sick of paying credit card fees on each purchase. Bitcoin costs are optional and frequently lower. All you must do to get initiated is a soft or hard wallet that keeps track of your balance and issues you a bitcoin address to enable you to store your digital assets (bitcoin). 

The wallet is worthless until you receive a bitcoin payment or purchase any at an exchange using dollars, pounds, euros, or any other currency. Regardless, whoever sends you bitcoins automatically broadcasts a message to the entire network of miners stating the bitcoins associated with the address should now be attached to another address.

Technically, every owner digitally signs bitcoin transactions, and each bitcoin has a mathematically verifiable chain of ownership. When a transaction is initiated, wallet software digitally signs the message, allowing all mining computers to verify that the transaction is legitimate.

What is Mining?

All mining computers gather recent bitcoin transactions into units called blocks. When competing miners have verified a block’s transactions, a block is added to the long chain of all the previous blocks. This chain enables computers to verify that a user isn’t attempting to spend the same bitcoin more than once. 

This method is secure because a particular number that fulfills certain mathematical criteria before a mining machine may add a block must be confirmed. 

How Much is Bitcoin Worth?

Bitcoin experiences ups and downs, like any other currency. The market determines how much it is worth, just like other currencies. In contrast to previous currencies, however, there is a limit to the total amount of bitcoins you can use. 

As of January 2015, we are just over halfway there, but the rules state that the number of bitcoins created with each block is reduced by half every four years. It will take some years to determine whether the entire bitcoin thing works out.

Final Thoughts

Never invest more than you can afford to lose when investing in anything, let alone with Bitcoin.

Future bitcoin price peaks could be as high as $500,000 or as low as $0. Although there is no way to predict the future, a binary result emerges with such cutting-edge technology. It will therefore be adopted, or it won’t. Bitcoin’s rarity might elevate it to the top of the global asset list if it is widely accepted.