Before you invest in Bitcoin, or for that matter anything, it would be wise to know what it means, where it came from, and how does it work.
Though the concept of digital currency is not new at all. It was first tried and tested almost 2 decades ago, but due to undermined performance and security characteristics, it was quickly discarded. Recently, an anonymous developer designed Bitcoin, which uses Blockchain technology at its core.
What is Blockchain?
Blockchain is the backbone of crypto-technology. It is indeed a series of blocks of information, linked to each other with the help of cryptographic code. It is was designed as a peer-to-peer network, that is accessible by all but not mutable. In fact, it cannot be modified once the data is fed, recorded, and stored.
Having said that, Bitcoin is relatively a young currency and is prone to dangers such as illiquidity. It is utterly recommended that one should maintain high security for their wallets. Also, it is recommended that compliance with the local laws should be taken care of prior to dealing with a fluctuating currency. Here’s the answer to your question, what is Bitcoin?
Some Facts About Bitcoin
Though it is a young currency, the market for this currency is ubiquitously flourishing. People are adapting to the changing modes of commercial conduct.
It is not the only cryptocurrency
Despite the fact that the terms cryptocurrency and Bitcoin go hand in hand, it is not the only cryptocurrency that exists. There are plenty of other cryptocurrency models available in the market. One can buy any cryptocurrency and of course, operate business around it.
Some example of other forms of cryptocurrency are Ethereum, Litecoin, Ripple, Dash, and so on. The list is still growing and new models are made available. All of these are more or less similar to Bitcoin.
Just like any other currency, its value fluctuates
The astonishing characteristic feature of Bitcoin is that its value keeps on fluctuating. Just as a legal tender, the fiat currency, keeps on fluctuating in terms of exchange value, Bitcoin also varies depending upon the significants of the exchange.
It can be used as a mode of exchange
Many countries have accepted the Bitcoin as a mode of exchange for making a purchase. In other words, you can purchase a Porsche by paying the seller in Bitcoin. This owes to the immense popularity that this digital currency has gained since it was introduced.
In fact, Estonia, the first digital nation in the world, although has not accepted the currency as a legal tender, still has allowed the exchange of assets in the traditional barter format.
You need to conform with the authorities
A crucial aspect of this currency is that it is not globally accepted despite being globally popular. One should be sure of the local laws surrounding bitcoin. For example, Estonia, a small European country, but one of the few offering digital residency, you can start a business related to bitcoin without being a permanent resident of the province.
We hope that this piece of article clears all your queries related to what is bitcoin.