Bitcoin is an electronic currency, also known as digital currency, or virtual currency, that enables decentralized peer-to-peer payments. Bitcoin is abbreviated as BTC and symbolized by ₿, similar to the Chinese yuan. The smallest units of a Bitcoin, 0.00000001BTC, are called Satoshis (or Sats in short). Bitcoin has a limited supply of 21 million BTC. Its genesis block was mined on January 3, 2009. Bitcoin halving occurs every four years. Essentially, all bitcoins will be mined by around the year 2140.
Although it is defined as a currency, unlike RMB and USD, Bitcoin is a virtual type of currency and does not come in the form of paper notes or metal coins. Just as game coins used in online games, Bitcoins only exist in the cyber world, invisible and intangible in the real world. What people talk about or what you see in Bitcoin is essentially a string of numbers, similar to the numbers in your bank account. Therefore, no matter whether you get your bitcoins by mining or from buying directly from an exchange, it doesn't mean that you actually get physical bitcoins, but rather that you have an extra string of numbers for each wallet address.
How Was Bitcoin Created?
On Oct. 31, 2008, an anonymous person or entity named Satoshi Nakamoto published a white paper, titled Bitcoin: A Peer-to-Peer Electronic Cash System, which announced the birth of Bitcoin protocol. The protocol does not refer to the above-mentioned bitcoin with the attributes of a currency, while it generates a system or mechanism for bitcoins. In other words, bitcoin protocol is a set of rules, regulating how bitcoins will be created.
To put it simply, the bitcoin generation mechanism means the bitcoin system generates a block to the distributed ledger every 10 minutes, whether someone keeps an account or not. Anyone can participate in the generation of the ledger on the premise that they need to solve a cryptographic hashing problem. Of course, this problem does not need to be calculated manually, but can be solved by computers utilizing the algorithm instead. Upon solving the problem, miners will be given the right to add a new block of transactions to the ledger or blockchain. Once the block is accepted by the blockchain, bitcoin’s built-in reward system compensates successful miners with a few Bitcoins. When bitcoin first emerged, 50 bitcoins per block were given as a reward to miners. The block rewards halve about every four years.
The genesis block, or the foresaid first block of the ledger, was mined by Satoshi Nakamoto himself on January 3, 2009, and he was awarded 50 bitcoins as the block reward. Today, bitcoin had come into its own as a cryptocurrency traded on dozens of exchanges and is accepted as payment at hundreds of locations.
What’s the Value of Bitcoin?
Bitcoin has been gaining increasing attention and recognition, and it has led to the rise of an industry in of itself. Its price continues to rally amid fluctuations. BTC prices have recently broken through the level of $60,000, establishing itself as the crypto market dominator. However, some may still wonder why bitcoin continues to march upwards in value, since it’s a virtual currency only existing in an intangible world, invisible in the real world? The reason is that people recognize its value and the technology that powers it.
So, what is the value of bitcoin?
1. Decentralized: Anyone can access the bitcoin system to jointly maintain the operation of the entire system, without relying on a single person or entity. Take a real-world case as example, you can make a direct peer-to-peer transfer to your friend without the interference and guarantee of a third party such as Alipay, WeChat and banks. Furthermore, the transaction will be added to the ledger of bitcoin network and jointly maintained by all the participants of the system.
2. Tamper-resistant: open and transparent. In the above case, upon the transfer, the transaction record will contain a timestamp and can’t be altered while being known to each one who accesses to the transaction network.
3. Investment value: As bitcoin is highly volatile in price, its initial vision of becoming a payment currency has not yet been realized. However, due to its limited supply and its anti-inflationary features, bitcoin is now regarded as an asset class with a high investment value.
The above three points are just part of understanding of the value of bitcoin.
How to Obtain Bitcoins?
1. Become a BTC miner: Figuratively speaking, it means to download a Bitcoin System APP and connect it with your PC (proprietary mining machines are available nowadays) before having it run automatically on the PC. According to the operating efficiency of your PC (mining machine), you will be awarded a certain amount of bitcoins for contributing your computing power.
2. Purchase: Buy BTC from digital trading platforms or OTC trading desks. Due to security risks, it’s not recommended that you buy bitcoins from OTC markets. Please purchase bitcoins from regulated digital asset trading platforms like AscendEX.