If you are like most people outside of the computer or tech industry, you probably think that Bitcoin is something that has only been around for a couple of years or so. What if we were to tell you that it is not actually as new as that?
It is only in the last couple of years or so that Bitcoin has been attracting mainstream attention, but the currency itself goes all the way back to 2009.
And, while it is now looked upon as a great investment opportunity, it was originally meant solely as a way to make peer-to-peer payments securely via the web.
It is a concept that caught on, and this is proven by the number of places you can use your coins online now. Want to book a flight with cryptocurrency? Head over to Priceline. Feel like using Bitcoin to shop online? Rakuten is your go-to. Feel like using Bitcoin to shop online? Rakuten is your go-to.
Feel more like a staycation? Then get your supplies or spruce up your home over at Shopify. Want to take a road trip? Head off to Tesla and swap your Bitcoin for a new set of wheels.
How Does Bitcoin Work?
It is not really all that complicated. You initiate a transaction to pay someone. You sign it digitally and then send out to the network. The transaction undergoes a verification process to ensure that it is a valid transaction. This could take minutes or hours, depending on how busy the network is.
Once the transaction has been verified, it will be added to the blockchain, and the change in ownership of the Bitcoin is recorded. There is no physical transfer of money as such – just a change in the records.
Now the person on the other end is able to use the coins that you sent her. She can either spend the coins by sending them out, or sell them on an exchange to convert them to a fiat currency.
What makes the system so secure is that there are no additions to the chain without the verification process being completed. Once the transaction has been added, it cannot be deleted or changed.
Bitcoin is a different way to approach sending currency, and it takes some getting used to, but it is highly effective. What will you spend your Bitcoin on?