Important facts about bitcoin everyone should know

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What is it?
Bitcoin is a digital currency. It was created in 2009 and is used to make payments of any value without any fees. It is generated by internet using cryptography which converts purchases and transfers record into an uncrackable code. Bitcoins are not issued or backed by any government of bank. There are no physical Bitcoins but is only referred to balances kept in a public ledger that is verified by a massive power of computing power.

How does it work?
Bitcoin is based on the use of peer-to-peer technology to facilitate instant transactions. It runs on a decentralized ledger called blockchain which lists record of all transactions updated and held by currency holders. Independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as miners, act as decentralized authority enforcing the credibility of Bitcoin network.

How its units are created?
This digital currency is created through a process called minning which involves using computer power to crunch transactions that creates Bitcoin units. Basically Bitcoins are created as reward to minning which is a record keeping service done through the use of computer processing power. Alternatively, Users can also buy Bitcoin from brokers, then store and spend those using digital wallets.

Why Bitcoin is getting popular?
There are two main reasons for the growing popularity of Bitcoin. First cryptocurrencies like Bitcoin provide a secure mode of payment with a certain level of anonymity. Transactions made using it cannot be faked or reversed and it involves very low fees making it more reliable than conventional currencies. People value it because it is free from government control and the fees bank charges and is looked upon as a tool to make private and anonymous transactions.
Second, as a new form of currency, it is known to boom suddenly, meaning a small investment can turn large sum overnight.

How it is different from conventional currency?
Unlike conventional currencies which are regulated and governed by institutes and governments, Bitcoin is based on peer-to-peer cash system marked with absence of any third party’s involvement in cash transactions. It means it is free from government control and banks cannot charge you for using it to make transactions.

What are similarities between Bitcoin and conventional currency?
Like conventional currencies Bitcoin has three qualities: it is hard to earn, limited in supply and easy to verify. Economists define money as a store of value, a medium of exchange and a unit of account and they agree Bitcoin has some way to meet all these criteria.

How many people are using it?
As of 2017, according to a research conducted by Cambridge University, the number of unique users of cryptocurrency was between 2.9 to 5.8 million.

Is it worth anything?
Yes. As of December 2017, there were around 16.7m bitcoins in circulation. Each was worth around $14,000 after a recent high of close to $20,000 for a market value of $230 billion.

Who created it?
No one knows conclusively about the inventor of Bitcoin. Satoshi Nakamoto is the name associated with the person or group of people who presented the idea of digital currency through Bitcoin white paper in 2008. Yet true identify of Satoshi Nakamoto is not known.

How about its price and volatility?
The price of bitcoins has gone through various cycles of appreciation and depreciation referred to by some as bubbles and busts. In 2011, the value of one bitcoin rapidly rose from about US$0.30 to US$32 before returning to US$2. In recent days, Bitcoin has soared as high as $20,000 before losing 30 per cent of its value sparking fresh speculation and fears of a bubble.

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