Bitcoin, also known as BTC, is a peer-to-peer decentralized digital asset using blockchain as the underlying technology. It was first proposed by Satoshi Nakamoto in 2008 in the white paper “Bitcoin: A Peer-to-Peer Electronic Cash System”. In 2009, it’s first block “Genesis Block” was mined, marking the start of the Bitcoin network and the beginning of the movement of encrypted assets and blockchain.
It was originally constructed as a “currency”. Due to the characteristics of Bitcoin’s “constant total amount” and “economic freedom”, more and more people now regard it as an investment commodity, much like gold. This is why Bitcoin is also known as “digital gold”. Some governments have also legally defined it as a currency, making it more visible to the public.
Bitcoin Features
Compared to traditional currencies, Bitcoin has the characteristics of decentralization, constant total amount, openness, transparency, immutability, global circulation, and security.
Bitcoin decentralization
Bitcoin is a distributed cryptocurrency. Its issuance and trading do not depend on centralized institutions but are determined by independent participants. The entry or departure of any participant will not have a decisive impact on the entire system. This is also the guarantee of the safety and freedom of Bitcoin.
Constant Total Amount
The total amount of Bitcoin is constant and mined according to certain rules. The algorithm determines that the total number of bitcoins is 21 million, and the bitcoin network releases a certain amount of bitcoins every 10 minutes. Since its output is halved every four years, it is expected to be completely issued in 2140. This also makes Bitcoin highly scarce and sought after by more investors.
Transparent and Non-tamperable
Any transaction behavior about Bitcoin is open and transparent and can be found on the blockchain. All transaction data cannot be tampered with. The identity of the trader is also anonymous, which provides privacy for users as there will be no public traces.
Safety
Bitcoin’s financial system is run by countless computers around the world. An attack on the blockchain would require hacking at least 50% of the world’s computers – which is extremely difficult and costly to execute.
Global circulation
Bitcoin is a valuable asset that is not controlled by any institution. International transactions such as cross-border remittances traditionally have to go through layers of foreign exchange control agencies, and the transaction time is extremely long. Bitcoin transactions only require users to enter a digital address, click the mouse, and wait for the network to confirm the successful transaction.
The above features of Bitcoin completely exceed the limitations of traditional currencies. However, there is no legal protection for Bitcoin transactions. Bitcoin’s irreversible nature may make users vulnerable to scams, and decentralization also means that there are no valuation guarantees or government support for Bitcoin.
Common uses of Bitcoin
Due to the above characteristics, Bitcoin has become widely recognized and used by people for online transactions and cross-border transfers. Bitcoin is now valued by more and more investors. Investors are holding it as a store of value for a long time to achieve anti-inflation and wealth appreciation.
Why & How to Own Bitcoin
Bitcoin enhances liquidity and reduces inflation risk. Its irreversible nature makes it attractive as the world no longer needs to trust third parties to make electronic payments. People can easily manage information about transactions/currency.
There are many ways to own Bitcoin, the common ones are mining, purchasing via exchanges, and airdrop rewards. In the early days, bitcoins can be obtained by mining, and the bitcoins obtained can be transferred to the bitcoin wallet. With the rising price of Bitcoin, the increasing computing power of the network, and the fierce competition in mining, the difficulty of mining is also greater.
For ordinary investors, Bitcoin can be owned by buying directly from exchanges such as MEXC or by participating in some bitcoin airdrop projects. If you want to buy BTC directly over-the-counter, there is a higher risk due to lack of guarantee, so you need to choose carefully.
For the comprehensive guide on how to buy BTC and other available tokens, please visit special MEXC How to Buy Guides Section.
Bitcoin vs Ethereum
Both Bitcoin and Ethereum are decentralized cryptocurrencies. However, their objectives differ greatly. Bitcoin was created for the sole purpose of being a secure digital currency, whereas Ethereum was built to create a safe, efficient, and decentralized network. The purpose of Ethereum is not to compete with Bitcoin but to show the world the possibilities that blockchain can bring forth.
Closing thoughts
Bitcoin has been in development for more than ten years, and the President of El Salvador said that Bitcoin has entered its teenage years. In the past ten years, the price of Bitcoin has risen from $0.0025 to a record high of $69,000. However, as all cryptocurrencies have high volatility, investors need to control their risk and invest prudently.
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