A little practical guide to Bitcoin (BTC) for dummies

A little practical guide to Bitcoin (BTC) for dummies

Bitcoin Survival Short Guide

Inflation figures make us realize that state currencies are as volatile as cryptocurrencies. So the media tends more and more to use Bitcoin as a model of a non-inflationary currency. But by the way, what is Bitcoin? For all those who are not yet experts in the world of cryptocurrencies, here are some essential elements to understand what defines Bitcoin.

Bitcoin, currency without control

Bitcoin finds its origin in the monetary crisis of 2008. Facing a crisis due to excessive monetary creation, Satoshi Nakamoto, this mysterious creator, wanted to create a currency that was not controlled by institutions and was not inflationary. On January 3, 2009, the first Bitcoin was “mined”.

In fact, this currency is based on blockchain technology, this account book updated block by block. To create bitcoins and update this ledger by validating transactions, computers need to use their computing power to solve an equation, to find the right encryption that allows you to go to the next block. So they contribute to bitcoin “mining” and get rewarded accordingly. This process ensures both the security and decentralization of bitcoin. No single computer has enough computing power to modify this program with impunity so no entity controls it. So the minors create an impersonal network and the computer code is the only law.

Rising value

This payment system is not just technology. It is the basis of an entire economy since thousands of cryptocurrencies appeared after it. But before going as far as this development, it is necessary to understand the economy specific to Bitcoin. In fact, unlike state currencies, bitcoin has a certain scarcity since they have a limited number. Every day new bitcoins are mined, at a rate that halves every four years, until 2140 when the last of the 21 million will be reached.

This scarcity created speculation and made bitcoin more than a means of payment, but also a store of value. In 2010, even bitcoin was only a few cents. But more and more people and institutions have invested in bitcoin. Halving after halving, the price of bitcoin rose to over $66,000 last November. Even if its price has dropped to 21,000 dollars at the moment, everything is a success in its evolution.

Thirteen years after the beginning of bitcoin, this digital currency has imposed its presence among the payment methods. Despite the momentary drop in bitcoin prices, their adoption is increasing. It is therefore essential to understand what defines the game changer.

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