What is Bitcoin (BTC)? What is "Digital Gold" Used For?

Bitcoin is a cryptocurrency, or virtual currency, that can be traded, exchanged, and used as a form of payment independent of central banks and governments. functions as money that does not require the involvement of a third party to facilitate transactions.

Instead, BTC uses a peer-to-peer model supported by blockchain technology. Peer-to-Peer (P2P) technology enables participants to conduct transactions without the use of a middleman.

What is Bitcoin?

BTC was created in 2009, and it was the first-ever cryptocurrency. BTC can be traded, exchanged, and used as a form of payment, completely independent of central banks and governments. This is why it is called a peer-to-peer currency. It doesn’t need a central authority to operate.

Instead, Bitcoin’s peer-to-peer (P2P) model works using a .

BTC was created by an anonymous developer (or perhaps a group of developers) using the fake name Satoshi Nakamoto. Satoshi Nakamoto's for BTC was an electronic payment system based on cryptographic proof.

BTC was the world’s first cryptocurrency. Even all these years later, and with thousands of other cryptocurrencies on the market, it still holds the position of being the most valuable cryptocurrency, with the highest market capitalisation. This means that more people have invested in BTC than in any other cryptocurrency.

BTC has also grown in popularity as a type of payment. BTC owners can use the crypto to buy items and services from merchants and retailers who accept BTC. Even merchants on can accept BTC, among other big names.

How does Bitcoin work?

BTC operates on a distributed ledger (think of it like a shared database) called a .

A blockchain is made up of blocks that are arranged by date, and contain data about each transaction on the BTC network. This information can include the date and time, the parties involved, the total value of the transaction, and a unique identification code.

The blockchain is a public ledger. This means that once a transaction (in the form of a block) is added, it is publicly accessible to anyone.

While anyone can see the transactions, it can be hard to determine who made the transactions, unless the wallets involved are named. You can have a nosey at the .

What is Bitcoin mining? How does it work?

BTC mining is when “miners” use powerful computers to add new records of BTC transactions to the BTC blockchain. The job of BTC miners is to put transactions into sequence, in order onto the BTC blockchain.

Miners have to solve hard maths problems to check that each new transaction is real. The first miner who solves the problem and adds a new group of transactions, called a block, to the BTC blockchain gets new BTC as a reward.

If two or even three miners publish a block at the same time, the winning block will be the one that has the most work.

History of Bitcoin price

Since the cryptocurrency's inception in 2009, the price of BTC has fluctuated dramatically. BTC surpassed US$0.10 for the first time in October 2010.

By February 2011, it was worth US$1. On November 10, 2021, BTC reached an all-time high of US$68,770. After that, the BTC price fell, but in recent weeks, the price is slowly rising again.

You can follow the here.

How many Bitcoin are there?

At the time of writing, there are around BTC in circulation.

However, there will only ever be 21 million, but this number is not expected to be reached until the year 2140.

One BTC can be divided into a smaller unit known as a Satoshi. There are 100 million Satoshis (Sats) in a BTC. You can think of Sats as the “cents” of BTC. For example, if one BTC is worth US$65,187.68, then one Satoshi is worth US$0.0006518768.

How is Bitcoin different from traditional money?

Traditional currencies are usually issued by governments. BTC is a peer-to-peer monetary system that is not controlled by a central authority.

Traditional currencies have a physical version, such as coins or notes (although this is fast disappearing). BTC, on the other hand, is a digital currency, with no physical version.

Traditional currencies are a legal medium of exchange because they are backed by their respective governments. But BTC isn’t welcome everywhere. It is illegal in several countries, however this may change as governments change.

Traditional currencies are printed by the government, and these governments can print more money whenever they feel like it. It is hard to know, therefore, how much money is actually in circulation. BTC, on the other hand, has a fixed limited supply of 21 million BTC. So the amount in circulation can’t be manipulated to get a desired outcome by anyone.

Is Bitcoin a good investment?

Cryptocurrencies are highly speculative, and investors should only invest what they can afford to lose. However, BTC is one of the most stable and least volatile cryptocurrencies. BTC's value is expected to rise further as it becomes more widely used as a medium of exchange.

How to buy Bitcoin?

You can buy BTC by signing up to CoinJar. The services available to you depend on the crypto regulatory policies in the state or country you live in. A step-by-step guide on how to do this is on the .

How to store Bitcoin?

You will need a place to keep your BTC safe and secure after you buy it. This place is called a wallet. There are different kinds of wallets, such as online or offline wallets.

Online wallets (also called hot wallets) are connected to the internet and let you do things like pay for things or use apps. Offline wallets (also called cold wallets) are not connected to the internet and are good for keeping your Bitcoin for a long time.

CoinJar also gives you an to store your Bitcoin. You can use CoinJar to send and receive Bitcoin from other people or places. You can also use CoinJar to change your Bitcoin into other currencies or cryptocurrencies.

How to store your Bitcoin in a wallet

To store your Bitcoin after you buy it from CoinJar, you have two options:

-You can keep it in your CoinJar online wallet. This is easy and convenient especially if you want to use BTC to pay for things and to trade for other cryptos. However, if an exchange gets hacked or goes bankrupt, then you could be at risk of losing your crypto.

-You can move your Bitcoin to your own offline wallet. This is more secure for the long-term. But it also means that you have to take care of your offline wallet and not lose it or forget your password. If you lose your offline wallet or your password, you will lose your Bitcoin forever.

What happens if you invest $100 in Bitcoin today?

It is important to say that before you start reading this section, no one can know what will happen in the future to any cryptocurrency price for certain. We can take educated guesses, but that’s all it is: A guess.

With that said, the price of Bitcoin is expected to rise in the next few years. But this depends on a whole ball of factors such as adoption by mainstream institutions and regulation.

Therefore, investing $100 in Bitcoin today could result in different outcomes, depending on when you sell your Bitcoin and how the market performs.

One possible positive outcome is that Bitcoin continues to grow in value and reaches new highs, as some experts predict.

For example, if BTC reaches US$1.48 million by 2030, as Cathie Wood, CEO of Ark Invest suggests, then your US$100 investment today (with BTC worth US$42,830.60 at the time of writing) would be worth about US$3452.

While this is possible, it is a really, REALLY optimistic outcome.

Don’t forget there’s another scenario. If Bitcoin crashes and loses most of its value, then your $100 investment today would be worth absolutely nothing.

Of course, these are just hypothetical scenarios. BTC is an unpredictable asset, however, it is fun to think about!

Can you convert Bitcoin to cash?

Yes, you can convert Bitcoin to cash using CoinJar. There are two main ways to do this.

The first way is to use the buy/sell tab in CoinJar, where you can sell your Bitcoin for local currency and deposit it into your CoinJar’s cash account. From there, you can withdraw your cash to your linked bank account or use it to buy other cryptocurrencies.

The second way is to use the , which is a crypto debit card that allows you to spend your Bitcoin directly at any place that accepts Mastercard.

CoinJar Card will automatically convert your Bitcoin to cash using CoinJar’s best rates whenever you make a purchase.

Why is Bitcoin real money?

Bitcoin is real money because it meets the criteria of money, such as being a store of value, a unit of account, and a medium of exchange. This is despite not being used by traditional financial institutions.

However, Bitcoin is not the same as fiat currency, which is issued and backed by governments. Bitcoin prices can be subject to market fluctuations, which can affect its purchasing power.

However, Bitcoin is real money: A new and innovative form of money that challenges the traditional notions of what money is.

While Bitcoin is not accepted everywhere, it has the potential to offer more benefits as more people adopt it.

Conclusion: What is Bitcoin?

Bitcoin operates as an open-source, digital currency that operates on a decentralised Bitcoin network, also known as the Bitcoin blockchain.

This public ledger verifies transactions using computational power in a process called mining. Miners use this power to solve complex puzzles and validate transactions, ensuring the security and integrity of the network.

In return for their efforts, miners are rewarded with new bitcoins. The total number of bitcoins is capped at 21 million, with new bitcoins being created until approximately 210,000 blocks are mined.

Anyone can invest in Bitcoin by purchasing it on cryptocurrency exchanges. It's important to note that Bitcoin is secured through cryptography and private keys, which are essential for controlling and managing one's Bitcoin holdings.