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Basic Questions about Cryptos / What is Bitcoin?
« on: December 12, 2022, 04:05:48 AM »
What is Bitcoin?
Bitcoin is a decentralized cryptocurrency and an innovative payment network. It’s free of central banks and provides a peer-to-peer network to transfer money. Every transaction is transparent and immutable. Investors use Bitcoin as a means of exchange as well as a store of value to hedge against inflation.
Who gave birth to Bitcoin? Satoshi Nakamoto, the anonymous name of the creator of Bitcoin. Satoshi began to think of a new currency when he saw central banks publish cash which caused inflation during the economic crisis. Fiat could be of less value due to inflation and people couldn’t do anything. He created Bitcoin with the purpose to provide an alternative payment method without the control of the central government.
How does Bitcoin mining work?
What is Bitcoin mining? Bitcoin mining is the process of getting new Bitcoin. It also confirms the transactions in the network running in Bitcoin code and sync to all nodes on the chain. ‘Mining’ is performed on a computer for hash operations. The first computer to find the solution to complex math puzzles will get the right for the next block and this happens every 10 minutes. The ability to find the solution depends on the portion of the network’s total mining power.
The supply of Bitcoin is limited and the total supply is 21 million. The current Bitcoin is 19.2 million. The Bitcoin quantity will be reduced by 50% every time it reaches 210000 blocks or reduced once every four years by design.
What determines Bitcoin’s price?
Since its birth, Bitcoin has had volatile prices due to many factors. Unlike fiat, Bitcoin is not issued by the government or bank therefore monetary policy, inflation rate, or financial measurement don’t influence its price. Bitcoin acts more like a commodity. The price is influenced heavily by supply and demand. It depends on how many coins are in circulation and how many people are willing to buy.
Bitcoin is a decentralized cryptocurrency and an innovative payment network. It’s free of central banks and provides a peer-to-peer network to transfer money. Every transaction is transparent and immutable. Investors use Bitcoin as a means of exchange as well as a store of value to hedge against inflation.
Who gave birth to Bitcoin? Satoshi Nakamoto, the anonymous name of the creator of Bitcoin. Satoshi began to think of a new currency when he saw central banks publish cash which caused inflation during the economic crisis. Fiat could be of less value due to inflation and people couldn’t do anything. He created Bitcoin with the purpose to provide an alternative payment method without the control of the central government.
How does Bitcoin mining work?
What is Bitcoin mining? Bitcoin mining is the process of getting new Bitcoin. It also confirms the transactions in the network running in Bitcoin code and sync to all nodes on the chain. ‘Mining’ is performed on a computer for hash operations. The first computer to find the solution to complex math puzzles will get the right for the next block and this happens every 10 minutes. The ability to find the solution depends on the portion of the network’s total mining power.
The supply of Bitcoin is limited and the total supply is 21 million. The current Bitcoin is 19.2 million. The Bitcoin quantity will be reduced by 50% every time it reaches 210000 blocks or reduced once every four years by design.
What determines Bitcoin’s price?
Since its birth, Bitcoin has had volatile prices due to many factors. Unlike fiat, Bitcoin is not issued by the government or bank therefore monetary policy, inflation rate, or financial measurement don’t influence its price. Bitcoin acts more like a commodity. The price is influenced heavily by supply and demand. It depends on how many coins are in circulation and how many people are willing to buy.