What is Cryptocurrency: A Beginner’s Guide

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Cryptocurrency has, in recent years, taken the financial, and investment industries by storm. Many are finding it hard to believe that something that started out as a social experiment, only popular among very specific internet subcultures, is now a massively popular, mainstream cultural phenomenon, with mainstream celebrities like 50 Cent, Paris Hilton, Elon Musk and Snoop Dogg singing its praises. 

As of 2021, over 50% of Americans claim to have some kind of connection to bitcoin, or other cryptocurrencies, with the number of people who claim to be interested in investing being even larger. Bitcoin is without a doubt the most popular investment option among young people, especially those of the millennial and Gen Z generation. After falling into disillusionment with the traditional investment industry, young people are looking into alternative choices, and most of them are led to bitcoin. 

But, bitcoin is still a relatively young phenomenon, and there are still many people who do not understand, and some who do not even know anything about it. In this article, we will take a look at what Bitcoin is, and give a short, beginner’s guide to those that may be unfamiliar.

What is Bitcoin? How does one trade Bitcoin?

Bitcoin is a form of decentralized, digital currency, the first of its kind, created by the mysterious Satoshi Nakamoto in 2009. Bitcoin transactions are controlled and recorded by a ledger called a blockchain. Blockchain technology is the basis of cryptocurrency, and most cryptocurrencies employ it in order to keep running. 

Bitcoin was first thought up in the late 2000s, and first made public in 2008 when Satoshi Nakamoto published his white paper, espousing the merits of blockchain technology and decentralized currency. Today, thanks to the massive amount of crypto trading websites like Bitcoin Billionaire online which make crypto trading safe, and easy for new investors, a single bitcoin unit is worth $55,000, a marked improvement over its 2009 value, which placed it roughly under a dollar. 

How does Bitcoin Mining work?

New bitcoins are produced through a process called bitcoin mining, but mining is so much more than that. It is also the process which confirms transactions made with bitcoin, and it is also a process which ensures that bitcoin transactions remain honest and fair. 

The process itself is costly and very often yields little-to-no rewards. Still, many proponents of bitcoin choose to partake in the process, for a number of reasons, one of which is their philosophical beliefs in a future where cryptocurrency is the norm, and another reason being, mining is a great way for programmers and mathematicians to hone their skills. 

Mining is performed through solving a series of extremely difficult mathematics problems, using sophisticated computers. The first machine that gets to the solution is awarded a block of bitcoin, after which the process starts up all over again. 

Another reason Satoshi Nakamoto came up with the idea of mining is to prevent the problem of double-spending which has plagued previous decentralized currencies. 

The Future of Bitcoin

At the start of this year, a bitcoin unit was worth $40.000. That price has drastically increased in the past year to where currently the price of a single bitcoin unit is at $55.000, and many analysts, experts and bitcoin connoisseurs are predicting for the price to go even higher. With companies, celebrities, and even entire countries like El Salvador accepting bitcoin as a viable alternative to fiat currency, the price of bitcoin can only get better, as more and more people accept it as a legitimate form of payment. Taking all of this in mind, it is a certainty that the future of bitcoin is a bright one indeed. 

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Danielle England

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