What is Bitcoin?
Bitcoin is an electronic monetary system using encryption to secure transactions and to control the establishment of new units. Every single transaction within the network is stored in a massive version of a general ledger called the blockchain.
Bitcoin is forgery-resistant preventing counterfeiters to manipulate the system and each blockchain is unique to each individual user’s personal Bitcoin wallet.
How Bitcoin Works
Bitcoin operates through independent individuals and companies participating in the Bitcoin network also known as “miners”.
Bitcoin mining is the process through which Bitcoins are released into circulation, used to secure and verify Bitcoin transactions and payments from one user to another on a decentralised network.
Mining involves adding Bitcoin transaction data to Bitcoin's blockchain. Each group of transactions is called a block which is secured by Bitcoin miners forming a chain. The blockchain serves to confirm transactions to the rest of the network once taken place. Bitcoin nodes use the blockchain in order to distinguish valid Bitcoin transactions from attempts to re-spend already used coins.
According to analysts, the set cap of Bitcoins makes the cryptocurrency more desirable than other assets with a set cap of 21 million Bitcoins. Bitcoin is also trivially divisible making it possible to purchase a fraction of a Bitcoin.
What is a Bitcoin worth?
The price of Bitcoin increased dramatically in 2017; a single Bitcoin was worth under $1,000 at the start of the year with the price peaking close to $19,000 towards the end of the year.
Progressively, more organisations are accepting Bitcoin as a means of payment and the price of a Bitcoin is dependent on the mining network size; the larger the network the more costly the price of Bitcoin production will be.
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