What is Bitcoin?
To put it plainly – Bitcoin is a digital currency. It is created and maintained digitally and has no physical presence (i.e. not printed). It can be traded or used to buy things online.
What makes it so different to conventional currency is that no single institution controls Bitcoin. The network is joined by people buying and trading Bitcoin and is maintained this way.
Bitcoin is based on Mathematics. Its creator Satoshi Nakamoto wanted to create a currency that was based on mathematical proof, independent of any institution. However Bitcoin cannot be printed or created in larger quantities. Only 21 million bitcoins can be in the market at one time, but these can be divided into small portions of Bitcoins.
Traders worldwide use software programs to track and predict Bitcoin trends, and this software is freely available to anyone wishing to use it.
— CoinDesk (@coindesk) July 6, 2017
8 Characteristics of Bitcoin
Bitcoin isn’t owned by one institution or central authority. The traders, networks and machines that mine Bitcoin are all part of running the network. This way there is no central authority making decisions on the currency.
2. Ease of use
Setting up an address for Bitcoin is really easy compared to setting up a bank account for trading currency. There are no fees and the registration is done in minutes.
3. Anonymity and transparency
While you can create Bitcoin accounts without using any personal information (names, address etc) there is a sort of general ledger called Blockchain that records every single Bitcoin transaction, and is accessible online. One can see how many Bitcoins are stored at a certain address but this address may be kept fairly anonymous with minimal personal information.
4. Tiny transaction fees
Once again, compared to bank charges, Bitcoin charges are fairly low. This way you are encouraged to trade and still retain the value of your Bitcoins.
5. Quick trading
Bitcoin transfers are almost instant and are not held in limbo. Once you trade Bitcoins, they will appear in the designated address almost instantly.
7. Difficult to commit fraud
Once Bitcoins have been sent to a certain address, you cannot call them back. This helps avoid any sort of fraud or scam where senders recall the currency sent to a buyer.
8. No inflation
Because there are only 21 million Bitcoins in circulation (with no more being created), you cannot have a government or authority flood the market with new notes or currency. This way there is no inflation within the Bitcoin market.
Using Bitcoin as a form of trading or investment is suited to those who want to be in full control of their trading. You are not subjected to any bank or institution. Having some tech-savvy will definitely help you along your Bitcoin journey. However there are a lot of resources online that will assist you along the way.
Here is a great video to watch if you are starting the Bitcoin journey