Bitcoin has become the world-famous digital currency. It has gained momentum and enables a lot of people to become wealthy overnight. However, it has faced a lot of criticism and praise. What is bitcoin? What are other things you should know about it? Let’s dive into it.
Definition of Bitcoin
1. Bitcoin is a type of digital currency that is decentralized and used as a medium of exchange and investment.
2. It can also be defined as a cryptocurrency organized in a blockchain with no physical presence and which can be bought, sold, and held (hodl) for several reasons.
A digital currency. Bitcoin is a major digital currency. Digital currencies are money that allows transactions to be done through the internet, computers, mobile phones, and other enabled hardware like POS (Point of Sale) machines. Unlike other digital currencies, it is decentralized. That means it cannot be controlled by a single person, institution, or government.
As of now, nobody has claimed he or she invented this form of money. Furthermore, the first mention of Bitcoin is on the website bitcoin.org created in 2008. The following year (2009) a whitepaper was published through a cryptographic mail by an unknown person or group of people called Satoshi Nakamoto. Since then, people have mined this currency and thereby made it infamous money only compared to commodities like gold.
Cryptocurrency. It is a major cryptocurrency. Others are Ethereum, Dogecoin among others. It surges to nearly 20 million Naira on the 14th of August, 2021. Cryptocurrency makes use of cryptography technology. That’s the ability to decode codes.
Medium of Exchange. This digital money has also been used as a medium of exchange. In February, Tesla started accepting Bitcoin as a means to get people to acquire their Electric Vehicles. But two months later the company through its boss stopped using it. In June 2021, El Salvador became the first country to legalize this cryptocurrency. While other countries are pumping money to create a digital form of their fiat currency called CBDC (that is, Central Bank Digital Currency).
Investment. It can also be used as an investment. People buy, sell, or hodl (hold) this currency. And many people have made huge wealth from it. As an investment, you can earn capital gains. If you have bought Bitcoin when it was less than 100 US Dollars and you hodl it till it becomes USD40,000, then you will have earned USD39,900.
In summary, Bitcoin is digital cash that no single person, institution nor government can control. The currency has helped many people to become wealthy through its investment opportunities and has been used as a medium of exchange to buy stuff through the internet.