Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
[17] As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.[18].
Research produced by University of Cambridge estimates that in 2017, there were 2.9 to 5.
8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
The word bitcoin first occurred and was defined in the white paper[32] that was published on 31 October 2008.[33] It is a compound of the words bit and coin.
Investing in Bitcoin and other cryptocurrencies can be risky and is not recommended for everyone. Before investing, you should carefully consider your financial situation and risk tolerance. Investing in Bitcoin and other cryptocurrencies can involve a high degree of risk, including the potential loss of your investment. It is possible to earn interest on Bitcoin, but it is highly speculative and involves additional risks. Interest earned on Bitcoin may be subject to taxes and other fees, and may not be guaranteed or insured by any government or third party entity. Therefore, you should always research any potential investment thoroughly before investing any money.
[34] The white paper frequently uses the shorter coin.
There is no central repository or single administrator for Bitcoin. The decentralized nature of the Bitcoin network spread responsibility for issuing new bitcoins and verifying transactions across many computers scattered around the globe. This decentralized approach is similar to how emails are sent and received today. However, unlike email addresses, people have many different Bitcoin addresses and a unique address should be used for each transaction.
If someone wants to send you bitcoins, they need your Bitcoin address. Just like with email, you don’t need to reveal your identity when sending or receiving bitcoins; however, unlike email, people can see which Bitcoin addresses belong to you if you reveal them publicly. This creates a potential privacy problem since anyone can see all of the transactions made by any Bitcoin address. However, there are ways to keep your identity relatively private when using Bitcoin; see below.
Since there is no central “validator,” users do not need to identify themselves when sending bitcoin to another user. When a transaction request is submitted, the protocol checks all previous transactions to confirm that the sender has the necessary bitcoin as well as the authority to send them.
The system does not need to know his or her identity.
In practice, each user is identified by the address of his or her wallet. Transactions can thus be performed anonymously between wallets. However, if someone knows your address (can be public), he or she can see all your incoming and outgoing transactions including how much bitcoin you own at any given time.
Can You Earn Interest on Bitcoin?
It’s possible to earn interest on bitcoin by lending it out through sites like Bitbond and xCoins.io. Lenders earn interest with each loan they make through these platforms.