In the past few sessions, Bitcoin was on a skyrocket rising to a new record around $1133. However, things have changed quickly within the same time frame.
Bitcoin crashed more than 20% during the same record high session, declining all the way back below $850, which raises a lot of questions. However, before going into the details and the possible reasons behind the crash lets first look at the definition of Bitcoin.
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
Why is Bitcoin Different?
Bitcoin can be used to buy things electronically. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
However, bitcoin’s most important characteristic and the thing that makes it different to conventional money is that it is decentralised. No single institution controls the Bitcoin network. This puts some people at ease because it means that a large bank can’t control their money.
Who Created Bitcoin?
A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees.
Can I Physically Buy Bitcoin?
This currency isn’t physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Banks can simply produce more money to cover the national debt, thus devaluing their currency.
Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are ‘mined’, using computing power in a distributed network.
This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network.
