How does Bitcoin work and is it for you?

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You’ve probably heard of Bitcoin before, but what is it? It is kind of a confusing concept. Currency as we knew it in the past in the 20th century was generally something you could physically hold in your hand, or at the very least represented something you could hold in your hand.

The most basic definition of Bitcoin is that it’s a type of cryptocurrency founded in 2009. This definition might leave you wondering, “What the heck is cryptocurrency?”

Cryptocurrency Crash Course

Cryptocurrency is essentially digital money. It uses encryption to regulate the amount of currency being created and transactions made. Cryptocurrency operates apart from any banks, which is why it is referred to as ‘decentralized’. This means it can’t be created by governments or companies. Cryptocurrencies use what are referred to as blockchains to record the validity of each unit of cryptocurrency.

Bitcoin History

Bitcoin was invented in 2009 by a mysterious person who goes by the alias Satoshi Nakamoto. It was the first type of cryptocurrency and is still the most popular today. At first, Bitcoin was only available by ‘mining’ it (how Bitcoin is created), but in 2010, it was given value and began to be traded. The value was unsteady for several years, but 2017 brought about a surge in Bitcoin’s value, making it a popular investment.

What Can Bitcoin Be Used For?

While you can’t use Bitcoin everywhere without exchanging it, there are some ways that you can use Bitcoin directly. Some websites accept the digital currency, and more and more of them are likely to begin accepting it as the popularity of cryptocurrency and Bitcoin specifically has exploded over the past few years.

The main thing that Bitcoin is used for is trading, however. People invest in Bitcoin with the idea that it will continue to increase in value and they’ll be able to cash in their Bitcoin for more actual dollars than they paid for it initially.

Should You Invest in Bitcoin?

That’s a personal choice. While Bitcoin looks like it’s here to stay, the regular ol’ dollar isn’t going anywhere. If you do decide to take the plunge and invest in Bitcoin, be sure you use a trusted marketplace that offers security. Some marketplaces with good reputations are Coinbase and Bitstamp. For more details check see below.

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