Bitcoin is a cryptocurrency that was the first to gain critical success on a global scale. Bitcoin’s success inspired many cryptocurrency projects and other companies to adopt the trend and technology.
Similar to fiat currencies (like USD), Bitcoin, otherwise referred to as BTC, has purchasing power, global liquidity and can trade for other digital coins or fiat currency.
BTC is different from fiat money because it is decentralized: no single governing agency or individual controls it. Instead, BTC uses a distributed ledger technology (DLT) and peer-to-peer technology that verifies all transactions through a blockchain.
BTC’s system is an open-source algorithm created by Satoshi Nakamoto. The true identity of Satoshi is unknown, but the Bitcoin digital currency has had, and continues to have a massive impact on the financial world.
This technology enables individuals to transact with one another without a trusted third party facilitating the transaction.
Instead, a collective network of individuals and companies in the Bitcoin network, called “miners,” are incentivized to verify and process transactions on the blockchain in exchange for mining rewards paid in Bitcoin every 10 minutes.
There will only be a maximum of 21 million bitcoin that will be mined, creating a fixed supply.
It will take until 2140 until the last Bitcoin is mined because every 4 years, the amount of Bitcoin paid out by the Bitcoin network reduces by 50%.
The price of Bitcoin is primarily determined by its fixed and limited supply, utility as a currency, and speculation.
Some financial experts argue that BTC has no intrinsic value; instead that the worth is assigned by its users through supply and demand.
On Dec. 17, 2017, the value of a Bitcoin reach an all-time-high of $20,000 on the CoinDesk price index.
On March 13, 2020, the value of a Bitcoin dropped under $4,000 due to the fear and uncertainty surrounding the Covid-19 pandemic. As of March 14, 2021, the price of a Bitcoin is more than $60,000.
The price can still fluctuate widely, but it has generally trended upwards since its price first skyrocketed in 2017. Bitcoin remains the most popular digital currency.
BTC’s price will likely increase sharply since there’s a fixed number of Bitcoins that can ever be mined.
Miners use powerful computers to solve complex mathematical problems the ensure the security and transactions on the Bitcoin blockchain. A typical computer will not have the processing power to mine BTC.
When Bitcoins are mined, they are verified through peer-to-peer (P2P) connections and these verifications are added officially to the blockchain.
The process of mining is energy and hardware intensive and requires significant investment, which supports the value of BTC. This makes BTC a highly secure currency and protects both buyers and sellers by verifying everything on the blockchain.
Because BTC is in the form of heavily-encrypted data, it is virtually impossible to create fake BTC.
There are many other factors that influence price, but generally BTC value increases when more traders are purchasing BTC using their fiat funds or other cryptocurrencies.
On the other hand, the price goes down when investors are selling their Bitcoins.
Like assets in the stock market, BTC prices are heavily influenced by speculation. Investors tend to buy more cryptocurrency assets when its value is rising.
Most wait for the price to plummet and buy in hopes that the value will soar again so they can sell their BTC back with profits.
Yes, you can indeed buy a fraction of a Bitcoin. You don’t need to purchase a whole BTC in one go since it’s a large sum of money.
In most exchange platforms, an option is provided to specify the amount of BTC the investor wishes to buy in small decimal numbers.
Alternatively, investors can convert fiat money to the corresponding fraction of BTC through the exchange.
In order to buy BTC, investors must first have the correct digital setup. First, obtain a cryptocurrency wallet. Second, load the wallet through mining or buying BTC from a cryptocurrency exchange.
Buying BTC is very different from the methods used for normal currencies. Regular banks will not take cash and hand out BTC.
There are certain ATMs on which Bitcoin can be purchased. However, cryptocurrencies are digital, meaning they do not have a physical form.
Register for a wallet using an email address, phone number or a user ID and secure it with two-factor authentication.
A wallet comes with a personal decryption key called a private key, that enables only the owner to access the funds. Wallets are used to receive BTC from others or to store purchases from cryptocurrency exchanges.
Alternatively, BTC seekers can mine this digital currency. Miners must have a computer with a decent processor and a powerful graphics card to compete with other miners on the Bitcoin network.
With cryptocurrency mining software, a PC’s idle computing power will be used to compute fractions of BTC that can be added to the blockchain.
Then, any BTC a computer mines is stored in the miner’s digital wallet.
A Bitcoin exchange is any online platform that trades BTC for other currencies. Create a secure account with your email address in order to participate in the exchange. Some exchanges do not accept fiat funds, so beginners may have to start with platforms that accept money or credit cards.
No single authority on BTC can tell when it is the right time to buy. The price can fluctuate wildly, so most veterans would say that investing can be risky.
Ideally, purchase when the price is nearing a swing low, which will help maximize gains. But, no one can tell for certain whether or not the downward trend will continue. Investors can track the price vigilantly, but should only commit an amount that they are willing to lose.
Several exchanges will allow BTC purchases with a credit card. However, large transaction fees may be charged to the credit card. Use fiat funds or other cryptocurrencies instead for trading.
As of writing, Bitcoin appears to be resistant to software bugs and to complete value loss. That is not to say this resistance may prove to change over time.
The success of Bitcoin has influenced the rise of other cryptocurrencies, commonly called alternative coins, or altcoins for short. Altcoins can be tokens or proof of work coins that utilize or leverage blockchain technology. Many altcoins operate on a decentralized, trustless system like BTC, allowing for their use without privacy concerns or high transaction fees.
For example, Ethereum (ETH) is the second largest digital currency in terms of market capitalization. It is the most widely used altcoin and many other altcoins use ETH’s code as well as smart contract technology as the basis of their blockchain systems.
Many altcoins serve as primary payment tokens in their respective platforms. Additionally, they can be used for third-party trading.
PKT Cash (PKT) is another altcoin that has begun to gain popularity.
PKT is a Bitcoin fork that replaces the SHA-256 proof of work with PacketCrypt, the world’s first bandwidth-hard proof of work.
There will be a total supply of 6 billion coins mined over 63 years. 20% of every mined block is paid to the Network Steward, which is a wallet address that is elected by POS vote.
The Network Steward funds community proposals that pay for open source development and maintenance of the PKT Network.
The PKT blockchain and bandwidth-hard mining is designed to decouple the role of infrastructure provider and network operator.
By doing this, PKT amaturizes these roles, which enables a new decentralized way to access the Internet via local mesh networking.
PKT Cash is the native currency that is paid to miners who mine PKT. The use cases for PKT Cash in the PKT Network are vast due to the native microtransaction capabilities of the blockchain.
PKT Cash utility use cases include paying for VPN connection speed at AnodeVPN, as well as soon paying utility bills via PKT Pal.
Development is also under way to launch a decentralized bandwidth marketplace, where trading bandwidth leases is possible.
There are two ways to mine PKT Cash: announcement mining and block mining.
Announcement mining can be done by anyone with bandwidth and CPU hardware. At this point, the miners upload and encrypt announcements, which are small amounts of data being sent from any computer device.
Block mining is more complex, where the announcements are being gathered and downloaded by the block miners.
Block miners then validate that these announcements comply with the parameters of each pool and then submit to the mining pool in exchange for a block reward payout. The reward payout is then shared with the announcement miners.
Cryptocurrency assets are generally bought and sold in different cryptocurrency exchanges, or between brokers, and peer-to-peer transactions.
PKT is not yet listed on an exchange, so is currently trading via peer-to-peer trading in the PKT Cash Trading Group on Telegram. Traders are actively buying and selling PKT Cash.
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