What Is Bitcoin In Simple Terms?
This article is intended to answer the ‘What Is Bitcoin’ question in very simple language. It is intended to simplify the topic so even a layman can understand. A bitcoin is an electronic currency (also called cryptocurrency). It is another form of online public money that is developed by meticulous mathematical calculations and monitored by millions of computer users (also called miners) around the globe. In simple terms, therefore, bitcoins are an electronic currency or electronic money that can be converted into long code strings which have monetary value.
How It Works
In addition to What Is Bitcoin, how it works is the next question most people ask. Bitcoins are full virtual coins that are created as ‘self-contained’ for any monetary value they represent, without the need for banks to store or move any physical cash. Bitcoins you own, act like physical gold coins; they have value and can be traded like gold nuggets from your pocket. You can use them for buying goods and services online, or you can save them and take a chance concerning their value rising through the years.
They are traded from the personal wallet of one miner to that of another. Wallets represent minor databases that are stored on Smartphones, computer drives, Tablets or anywhere in the cloud. For all intent, they are resistant to forgeries.
The currency is so computationally-intensive to create that it is it is never financially worth the hassle for counterfeiters to try manipulating the system. So, you can see how interesting the answer to the ‘What Is Bitcoin’ question can get. But you should still read on to learn more.
Regulation and Value
A bitcoin’s value varies daily; bitcoins exchange websites display their exchange prices or ‘offers’ in tickers featured on their homepage. Bitcoins worth billions of dollars are currently in existence. The crypto-currency is completely decentralized and unregulated. It has no national mint or bank and does not feature a depositor insurance coverage. It has no collateral and is fully self-contained.
This means there’s no precious metal backing it; its value lies within the bitcoin itself.
Bitcoins are managed by ‘miners’, the network of individuals that contribute their PCs to the digital currency’s network. UTI-Tech, which is a service that mines bitcoins and offers a 1% return, is a good example. The miners function as the swarm of auditors and ledger keepers for all bitcoin transactions. They are remunerated for their accounting efforts via earning new bitcoins for every single week that they devote to the network.
What Is Bitcoin: Usage Fees
Fees for using bitcoins are quite negligible. Nevertheless, as no banks are involved, bitcoins and other digital currencies have no ongoing fees. Instead, you pay negligible fees to three bitcoins services groups; the nodes (servers) that support miner’s network, online exchanges that change bitcoins into money currencies and the mining pools you subscribe to so you can deal in bitcoins.
Some server owners charge one-time transactions fees of just a few dollars when you send money using their nodes. Online exchanges similarly charge whenever you cash bitcoins in Dollars, Euros or any other money banking currency. In addition, most pools either charge a tiny percentage as support fee or ask their pool members for little donations.
These are the simple bitcoin facts this article can bring. It is hoped that the article has answered the ‘What Is Bitcoin’ question in its most basic form. Subsequent articles will certainly show you that using and dealing in bitcoins can be great fun and very lucrative.