If you’ve spent any time on the internet over the past few months then you’ve probably heard the terms “Bitcoin” and “cryptocurrency.” In fact, Bitcoin is more popular than Beyonce and Kim Kardashian in terms of searches on Google and it’s clear that many people around the world are eager to learn more about this emerging technology.
Bitcoin is a really interesting piece of technology and it’s little wonder why so many technology fans are so interested in it. So here are five things that technology fans need to know about Bitcoin before they get invested.
Bitcoin is Decentralized
A stack of gold and silver Bitcoin tokens sits in front of a computer via Pexels
Bitcoin operates independently from the central bank of any one nation. This is something that we call “decentralization” and it is this decentralization that represents one of the biggest draws to this technology.
Rather than being controlled by a single body (a government, agency, or group), instead, Bitcoin is maintained by a group of volunteer coders and there is an open network of computers all around the world that helps to maintain the Bitcoin ecosystem. The big benefit to this is that unlike traditional forms of currencies, Bitcoin is essentially maintained by the community which means that no one can control it in the same way traditional currency can be controlled.
Bitcoin Can Be Spent On All Sorts of Things
While there is much talk about accumulating Bitcoin (more on that later), what you may not know is that Bitcoin can actually be spent in a range of different ways.
There are all sorts of ways that you can spend your Bitcoin, including travel company Expedia, Overstock.com which offers all sorts of products (including home decor and technology), and Dish Network, the satellite and Internet service provider. You can also spend Bitcoin in online casinos such as Bitcasino playing online slot games, taking part in casino games with live dealers, dice games and more. You can even spend it on mobile apps (Microsoft accepts Bitcoin) or use it to order pizza!
There is a Limited Amount of Bitcoin
Another benefit to Bitcoin is that there is a limited amount of it in the world. With traditional forms of currency, central banks and governments have the ability to flood the market with more of that currency which can weaken the price of it and make it less valuable for people who have it.
With Bitcoin, that isn’t the case. There is a finite amount of Bitcoin in the world, capped at 21 million Bitcoin. A small amount of new Bitcoin will enter the market each hour through mining, which is where computers solve complex math problems to solve encryption. This means that the price or value of a Bitcoin is based on the demand for the cryptocurrency.
Bitcoin is Not the Only Cryptocurrency
A Bitcoin and an Ethereum token sit next to each other in front of a computer via Pexels
Although Bitcoin is by far the most talked about cryptocurrency out there, it is just one of several available forms of cryptocurrency. Other cryptocurrencies include Litecoin, Ethereum, Ripple, Bitcoin Cash, and NEO.
Each cryptocurrency has its own value and its own benefits, for example, many people like Ethereum because of its use in smart contracts (a new form of contracts that allows transactions to take place using algorithms rather than human intervention).
Bitcoin Can Be Divided Up
If you have a single dollar, you can divide it many times. You can divide into a quarter, a dime and eventually a cent. But a cent is the smallest division of a dollar that you can carry around in your wallet – if you try to purchase something in a store with half of a cent coin, you’re going to have some difficulty.
A Bitcoin, though, can be divided up into much smaller units than that, with the smallest being called a Satoshi which is one hundred millionth of a bitcoin (฿0.00000001). By being able to divide a Bitcoin up like this, it allows you to conduct a much wider range of transactions than what you can do with a full dollar or a single cent.
The interest surrounding Bitcoin and the other cryptocurrencies is growing in a big way. More and more people are getting invested in the technology, but it’s clear that for anyone who does so, there is a lot to learn.