When it comes to Bitcoin, there is a lot of confusion out there. What exactly is a Bitcoin? Is it a digital currency? Is it an asset? Is it a commodity? The answer is: all of the above.
Let’s take a closer look.
A Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
NOTE: WARNING: Bitcoin is a digital currency, which means it is not physical, and exists only on the internet. It is not backed by any government or central bank, and therefore there is no protection against fraud or theft. Investing in Bitcoin can be highly speculative and risky, and it is advised to research thoroughly before buying into this form of currency.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
The IRS classifies bitcoins as property, not currency. This has come with some benefits and some challenges.
One benefit is that capital gains taxes don’t apply to bitcoins, at least not yet. One challenge is that bitcoins are not widely accepted as payment by most businesses.
So what exactly is a Bitcoin? It’s a digital asset, a payment system, and (in some cases) a currency. Its value comes from its rarity and its usefulness as a way to make secure, decentralized transactions without the need for a third party such as a bank or credit card company.
6 Related Question Answers Found
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 was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009.
What is Bitcoin? Bitcoin is a cryptocurrency and a payment system, first proposed by an anonymous person or group of people under the name Satoshi Nakamoto in 2008. Bitcoin is decentralized, meaning it is not subject to government or financial institution control.
A 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 was invented in 2008 by an anonymous person or group of people using the name Satoshi Nakamoto, and started in 2009 when its source code was released as open-source software.
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 was invented by an unknown person or group of people using the name Satoshi Nakamoto in 2008.
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.
When it comes to Bitcoin, there is a lot of confusion out there. Some people think that it is a currency, while others think that it is a commodity. There is also a lot of debate over how it should be classified.
