What Exactly Is Bitcoin And How Does It Work?

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Now more than ten years old, Bitcoin is currently worth almost $14,000 with the price looking like it will continue to rise for the rest of the year and in 2021. For this reason alone it has drawn lots of interest from potential traders and even the wider general public. With this in mind, we explore the cryptocurrency a bit more so that those thinking of investing in it have a better understanding. 

What Is Bitcoin?

One of the many cryptocurrencies that are now available, Bitcoin is a digital or virtual currency that exists completely online. Acting as an online form of cash, it can be used to purchase an array of different services and products. However, there are very few shops that actually accept it and a number of countries have even gone as far as banning the use of it altogether. 

Here Is How Bitcoin Works

An individual Bitcoin is very similar to a file on a computer that is stored inside of a digital wallet application on either a smartphone or a computer. The transferring and trading of them is something that is done entirely online. Bitcoins (or parts) are able to be sent back and further, to and from a digital wallet. When this is done, the transaction is made note of and recorded in a list that is publicly visible. This is called the blockchain.

Thanks to this, the history of a Bitcoin is very easy to trace and also works to stop individuals from either undoing transactions, making copies, or spending currency that is not theirs to spend.

How To Buy Bitcoins?

There are a number of different ways in which an individual can choose to purchase Bitcoins. They can either be bought via the use of real (fiat) money, sent to you as a form of payment for a product or service, or be created via the use of a computer. If you want to buy Bitcoin in Australia then visit https://swyftx.com.au/buy/btc-bitcoin/, where you will be able to get it for the best possible price. 

How Are Bitcoins Created?

As part of the Bitcoin system, computers are required to process the numerous different transactions that are taking place on a now daily basis. For each and every transaction, the computer needs to perform a number of highly difficult mathematical sums. Upon doing these, they are on occasion rewarded for it in the form of a single Bitcoin.

This had led to some individuals setting up numerous powerful computers in the hope of performing these sums and being rewarded with a Bitcoin. This is a process that is known as mining. However, over recent years, the sums have gotten that difficult (in order to stop too many Bitcoins being generated) that it can now take years of mining to get just one Bitcoin. For most individuals this is not a viable option and would actually end up costing more in electricity in what they would get in Bitcoins.

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