The leading cryptocurrency PR company knows how difficult it can be to understand cryptocurrencies, Bitcoin in particular. Bitcoin is one of those things that everyone talks about, but some people just nod along and pretend to know what the heck is going on. If you are one of these nodding-along people, follow this guide on the basics of Bitcoin to gain a better understanding of this obscure form of money.
What is Bitcoin?
To put things as simply as possible, Bitcoin is a form of money. Unlike traditional money like banknotes and coins, you can’t actually hold Bitcoins in your hand. This is because Bitcoin is a digital currency that functions entirely through digital means. No coins are melded, no bank notes printed, and no major financial institution is in charge of Bitcoin operations.
A Brief History of the Cryptocurrency
The concept of cryptocurrency has been around for a while, but the official name “Bitcoin” was not launched until 2009. At this time, Bitcoin became fully available to the public for the first time – before it was only available to a handful of underground cyber experts. The real identity of the Bitcoin creator still remains unknown, but he (or she) is referred to as Satoshio Nakamoto.
Nakamoto’s goal was to create a new electronic cash system, and that he/she did. Another part of the goal was to ensure that this cash system was void of a central authority, which Bitcoin is. In other words, there is no reigning authority over Bitcoin controlling the currency and its users. At first, the cyber money was only traded among a select few, but in 2010 the first official Bitcoin transaction was made.
And guess what this transaction was for? Two large pepperoni pizzas. That’s right, the first ever Bitcoin purchase of 10,000 coins was traded for two hot and ready pizzas. If that Bitcoin holder would have kept those coins, they’d be worth about $100 million today. $100 million can buy you a lot of pizza.
What Makes Bitcoin Better than Other Currencies?
The main perk of investing in Bitcoin is the fact that Bitcoin holders can remain 100% anonymous. This means there is no need for full names, account numbers, social security numbers, or any other personal or financial details. Instead of using personal and financial information, Bitcoin utilizes something called blockchain technology and encryption keys to ensure complete anonymity.
What Are the Risks of Investing in Bitcoin?
Since Bitcoin is not operated by an official financial institution, there is a lot of fluctuation when it comes to the currency’s value. This has become especially apparent within the past few years, with Bitcoin stock going up and down more than a teeter totter.
Forbes says that there is also risk in regards to the anonymity of Bitcoin. The fact that Bitcoin can be used anonymously is a major perk, but it also means that dealing with lost, stolen, or cyber hacked coins can be difficult. For this reason, it is essential to store your Bitcoin investment in a secure wallet, like Jaxx.