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Understanding BitCoin

Other | Thursday 16th August 2018 | Roberta Micallef

Bitcoin is a digital currency. It can be passed from one person to another through codes or "addresses". Bitcoin was created in 2009 as a way to make transactions without a middleman

Bitcoin works on blockchain technnology. The Blockchain is simply a network of computers around the world. It is one giant and accessible database that logs all the transactions and what address owns each bitcoin or each piece of one; since each one is divisible. 

Bitcoins are not connected to any tangible assets. Unlike money, no-one can print more to manipulate the market. There are 21 million of them and that’s it.

 

The value of a Bitcoin is pretty much governed by the rules of supply and demand. So the more people buying and selling, the more demand there is. The more demand there is, the more the value goes up. No one can magic up more bitcoin, so everyone has equal rights to bitcoin

Many people are attracted to the currency because of its decentralised nature.

These cryptocurrencies are also borderlessBitcoin was crucial to Venezuelans as one of the few ways they could put food on the table when the economy collapsed.

In some ways, it evens the playing field. Bitcoin has equal opportunities of investment. However, the price is volatile and if you are going to invest follow the rule, buy low and sell high.

This article is NOT financial advice.

 

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