Bitcoin: everything you need to know about BTC
Axel has been immersing himself in the world of crypto and blockchain for quite some time, which he then translates into understandable articles.
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What is Bitcoin?
Bitcoin is a form of digital money originating from the internet, where central authorities like banks or governments are no longer necessary. Instead, Bitcoin utilizes a peer-to-peer internet network to directly confirm purchases between users. The absence of gatekeepers like banks opens up an array of new possibilities, including the ability to move money faster and cheaper across the global internet and allowing individuals to have maximum control over their own assets.
The currency was launched in 2009 by a mysterious developer known as Satoshi Nakamoto. Thus, Bitcoin (BTC) became the first and most valuable newcomer among cryptocurrencies. Nakamoto originally designed bitcoin as an alternative to traditional money, with the ultimate goal of it becoming a globally accepted legal tender.
Since Bitcoin's inception, thousands of new cryptocurrencies have been launched, but bitcoin (abbreviated as BTC) remains the largest in terms of market capitalization and trading volume.
Bitcoin can function as:
- An investment instrument
- A store of value, comparable to gold
- A method to transfer value worldwide
- Even simply a way to explore emerging technology
Bitcoin is legal to use, hold, and trade, and can be spent on anything from commercial purchases to travel and charitable donations. The currency is used as a medium of exchange, a store of value, and a unit of account—all attributes of money. However, it exists purely digitally—there is no physical version of it.
How does Bitcoin work?
Bitcoin (BTC) is a revolutionary digital currency considered as the first successful example of a decentralized electronic payment system. The currency was designed in 2009 by an unknown individual or group under the pseudonym Satoshi Nakamoto.
In contrast to traditional currencies issued and regulated by central governments or banks, Bitcoin operates on a decentralized system where transactions occur directly between users without the involvement of intermediaries. This makes transactions more secure, faster, and cheaper.
BTC utilizes blockchain technology, meaning transactions are stored on a shared and public ledger. This ledger is immutable, providing transparency and security for all users of the Bitcoin network.
In addition to facilitating transactions, BTC can also be used as an investment. Many people view the currency as a way to safeguard their wealth against inflation and other economic risks.
Since its launch, Bitcoin has experienced significant volatility in terms of value and adoption, yet it remains one of the most popular and well-known cryptocurrencies worldwide.
The BTC token
The token economy of Bitcoin (BTC) is based on its limited supply and the demand for the currency. There will only ever be 21 million BTC issued, which means that there is a finite number of tokens available.
The issuance of new Bitcoins is controlled by the Proof of Work (PoW) consensus algorithm, where new tokens are minted as rewards for validators (known as miners) who offer their computing power to confirm transactions and add new blocks to the blockchain.
BTC serves various purposes, including facilitating transactions between users, storing and preserving wealth, and enabling investments. As a result, the token economy of Bitcoin operates within a complex internal market, with the value of the currency influenced by various factors, including demand, supply, technological advancements, and economic and political developments.
The Technology Behind BTC
Each Bitcoin is a file stored in a digital wallet on a computer or smartphone. To understand how the cryptocurrency works, it helps to grasp these terms and gain some context.
Bitcoin is powered by open-source code, known as blockchain, which creates a shared public history of transactions. This history is organized into blocks that are linked together to prevent manipulation. This technology ensures a permanent record of each transaction and provides every Bitcoin user with the same knowledge of who owns what.
Private and Public Keys
A Bitcoin wallet contains a public key and a private key, which work together to enable the owner to initiate and digitally sign transactions. This is a central function of Bitcoin—safely transferring ownership from one user to another.
Users on the Bitcoin network verify transactions through a process called mining. This process is designed to confirm that new transactions are consistent with previous ones completed in the past, ensuring that a sum of bitcoin cannot be spent accidentally twice.
Benefits of Bitcoin
Bitcoin has been praised for years for its success, stability, and innovation. What are the biggest advantages of investing in bitcoin?
- Reliability: The oldest and largest cryptocurrency boasts a solid history and well-developed best practices.
- Scarcity: There is a supply limit of 21 million bitcoins, so your position cannot be diluted by currency printing.
- Medium of exchange: Bitcoin is now a legal currency that can be used for payment in many places worldwide.
- Convenience: Transaction costs are relatively low, and microtransactions down to one-thousandth of a cent are possible.
- Programmable: Bitcoin's technology continues to improve and can serve as a foundation for many other applications.
Drawbacks of Bitcoin
Bitcoin has many positive qualities, but it still cannot solve all problems. Why is caution needed when investing in bitcoin?
- Bitcoin mining consumes a significant amount of energy and is, therefore, not sustainable.
- Bitcoin is also subject to macroeconomic conditions and can decrease in value.
- Despite its growing popularity, the currency has not yet seamlessly integrated as an effective means of payment.
Who is the founder of Bitcoin?
The founder of Bitcoin (BTC) is known by the pseudonym Satoshi Nakamoto. To this day, the identity of Satoshi has not been confirmed, and it remains a mystery who is behind this pseudonym. Satoshi Nakamoto published the Bitcoin whitepaper in 2008, outlining the fundamental principles of the cryptocurrency. Satoshi developed the first working prototype of Bitcoin and played a key role in the creation and growth of the cryptocurrency. In 2011, Satoshi suddenly disappeared from the public eye and has not been heard from since. It remains one of the biggest mysteries in the technology and financial world and continues to be a subject of speculation and discussion.
In 2025 experts expect a minimal price of €127,498.42 and a minimal price of €421,391.15 in 2030.
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Historical Bitcoin price
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Frquently asked questions
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In April 2011, the value of bitcoin reached 1 dollar for the first time. In June 2011, it was 10 dollars, and in April 2013, it reached 100 dollars. Until that time, the only transactions since its launch in 2009 were the rewards for mining blocks.
The maximum number of bitcoins that can exist is 21 million, and around 18 million bitcoins have already been issued. Therefore, approximately 3 million Bitcoins could still be added.
The bitcoin price changes every second and can both rise and fall. If you blink, everything has already changed. According to analysts, the value of BTC is expected to rise in the coming years. You can check the current expectations for Bitcoin on the expectations page.
A video explanation of Bitcoin
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