In order to understand what bitcoin really is, it’s necessary to understand how it really works, and in order to understand that, let’s take a look at the characteristics of the popular cryptocurrency that differentiates it from digital versions of the traditional forms of currency (dollars, pounds etc.) or “fiat currency:”
Bitcoin's Special Characteristics
Decentralization
No one controls the bitcoin network. The network is maintained by a group of coders and run by a dedicated and distributed open-network of computers that spans the entire world. Banks and financial institutions are responsible for maintaining the integrity of transactions when it comes to digital fiat currencies, but in the case of bitcoins, the distributed open-network does that job.
Limited Supply
Electronic versions of fiat currencies are the same as the physical ones: they have an unlimited supply. Banks control the influx of these currencies and their values relative to other currencies. Bitcoin is completely different: only 21 million bitcoins can ever be created. The algorithm that runs the cryptocurrency issues a small amount of new bitcoins every hour, and will continue to do so at diminishing rates until the 21 million cap is reached.
Micro-transactions
The smallest unit of a dollar is a cent, which is 1/100th of a dollar. Do you know the smallest unit of a bitcoin? It’s called a Satoshi, and its value is 0.00000001 BTC or 1/100000000th of a bitcoin. This opens up opportunities for micro-transactions that are not possible with electronic fiat currencies like the dollar. To get more information visit #btc price.
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