Bitcoin is one of the most popular cryptocurrencies. There are thousands of other virtual currencies, but none has been as discussed and criticised as bitcoin. Unlike dollars or European money, bitcoin is not controlled by any central bank. There is no one who can decide to keep your money safe for you and then withdraw some percentage at the end of the year (for example). In the world of cryptocurrency, therefore, all transactions must be made directly between two parties interested in buying or selling a good or service.
It is a virtual currency
In short, bitcoin is a virtual currency. It does not exist in physical form and is not backed by any government or central bank. Bitcoin can be traded like a commodity on exchanges or privately between people. There are no real coins, only balances associated with public and private keys.
The first step to understanding bitcoin is to understand how currencies work today and what makes bitcoins different from traditional currencies.
How to use it
Bitcoin is a virtual currency that allows peer-to-peer payments without going through a central authority. Bitcoin is not controlled by any government or bank and can be used on the Internet to make purchases, transfers and payments. Bitcoins can also be exchanged for other currencies (real-world money) or for goods and services in a process called mining.
To use bitcoins, you need a wallet in which to store bitcoins. You need an address that you can use to receive bitcoins from others and an account number that is used as the public key when sending bitcoins from one user to another. The public key looks like this
What are its advantages?
Bitcoin is a decentralised cryptocurrency, which has no government control, fees or control by banks.
Bitcoin offers the following advantages:
- Peer-to-peer economy (direct participation)
- No central authority (decentralised control)
- No payment intermediary (no fees due to third parties)
- Could it be a threat to the world economy?
- Many people have asked: ‘Is Bitcoin a threat to the world economy?’
- The answer is yes. But it is not the kind of threat that many might think.
- Bitcoin could be considered a threat because it would undermine the world’s banking systems and consequently could lead to a financial revolution.
- Bitcoin can help us defeat poverty
Bitcoin is a digital currency, or cryptocurrency, that can be used to buy and sell goods and services. It is not controlled by any government or bank, but uses an open ledger system called blockchain technology to keep track of all transactions. This means that no entity controls Bitcoin but the power of your money is only in your hands.
Blockchain technology has been presented as the solution to many problems facing our world today: poverty eradication and healthcare are just two examples. In theory, blockchain will allow us to better manage our food supply chains, so that we know exactly where our products come from; we could also use blockchain technology in healthcare to ensure patient privacy, while allowing doctors to access them when necessary.