Bitcoin is the most popular cryptocurrency in the world. It ranks No. 1 in the market capitalization ranking, according to CoinMarketCap. The price of 1 bitcoin soared to $20,000 in 2017, but dropped a few years later. Now bitcoin is priced around $47,000.

What is bitcoin

Bitcoin is a digital currency created in 2009. Unlike state currencies, bitcoin is created, distributed, traded and stored using a decentralized system that is based on blockchain. Now you even have the opportunity to buy a bitcoin card at https://cryptopay.me/bitcoin-debit-card. On the technical side, Bitcoin is software, a set of protocols and processes. Every participant in the system has transparent access to bitcoin transactions. Each transaction is verified by a huge amount of computing power. Blockchain technology makes it impossible to forge records in such a system.

Simply put, a blockchain is a set of blocks. Each block stores a set of transactions. All computers that are part of the system keep copies of the blockchain. Each time these copies are reconciled. To break into the system, an attacker would need to use 51% of the computing power that makes up bitcoin. As of January 2021, Bitcoin has about 12,000 nodes, making an attack unlikely.

How Bitcoin is mined

The process of mining bitcoin is called mining. Mining can be compared to gold mining. Both will require equipment and a lot of energy. To mine bitcoin, you have to solve a computational puzzle. At the same time, the complexity of the puzzles is constantly increasing. Puzzles are solved to maintain a transaction registry. The computer that manages to do this receives a small number of bitcoins as a reward.

Why bitcoin has value 

Compared to other types of money, Bitcoin is not regulated by any bank and is not subject to inflation. The system does not charge interest for transactions like e-wallets do. If you compare bitcoin to government currencies, there are 6 differences.

1. Scarcity. When Bitcoin was launched in 2009, its developers limited the supply of tokens in the protocol to 21 million. Every 4 years, the rate at which new tokens appear is reduced by half. The current supply of bitcoins is 18 million.
2. Sharing. Bitcoin is divisible by up to 8 units. This helps distribute individual bitcoin units throughout the global economy.
3. Usefulness of the technology. Bitcoin is based on the blockchain. Blockchain allows transactions to be made securely and transparently. Because of these qualities, blockchain is used in other areas as well. You can even use a modern card to pay for purchases https://cryptopay.me/buy-bitcoins.
4. Transportability. Bitcoins can be transferred to counterparties overseas in minutes, regardless of the size of the transaction. International transfers of conventional currency take more time and money.
5. Durability. For example, a dollar bill can be torn or burned. A digital form of payment, on the other hand, is not susceptible to physical damage and does not depend on banks in any way.
6. The impossibility of counterfeiting. Due to the same decentralization, bitcoin is incredibly difficult to counterfeit.