What is Bitcoin?
Want to start buying Bitcoin? Start here: Coinbase
Bitcoin is a decentralized digital currency that operates outside the control of governments and banks. It was created in 2008 by an anonymous individual or group using the pseudonym Satoshi Nakamoto, and launched in 2009. Unlike traditional money, Bitcoin is built on blockchain technology, which is a public ledger that records every transaction securely and transparently.
The core idea behind Bitcoin is financial sovereignty. It allows anyone to hold, send, and receive money without needing permission from a central authority. This makes it particularly valuable in places where traditional banking systems are unreliable or restrictive.
Bitcoin has a fixed supply of 21 million coins, which makes it scarce and resistant to inflation. Unlike fiat currencies, which governments can print endlessly, Bitcoin’s scarcity helps protect its value over time.
There are three main ways people interact with Bitcoin:
1. Buying and holding it as an investment, believing it will appreciate in value.
2. Using it for transactions, such as online purchases or remittances.
3. Mining, which involves validating transactions on the network to earn rewards.
Bitcoin has faced skepticism from governments and financial institutions, but its adoption has continued to grow. Today, major companies like Tesla and MicroStrategy hold Bitcoin on their balance sheets, and nations like El Salvador have embraced it as legal tender.
Despite its potential, Bitcoin is not without risks. Price volatility, security concerns, and regulatory uncertainty are factors every investor should consider.
Understanding Bitcoin is the first step in deciding whether it fits into your financial strategy. In future posts, we’ll explore how to buy Bitcoin, secure it properly, and maximize its potential.
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