What is Bitcoin?
Bitcoin is a digital currency secured by cryptography, which is traded outside the jurisdiction of a central authority. This currency was created in 2009 by a mysterious person who called himself Satoshi Nakamoto, and the currency was introduced primarily to be used in payment operations that are not subject to government oversight, transaction fees, or delays in transfers - unlike traditional currencies. "Mandatory" (lurica).
Back in 2010, the price of Bitcoin was about 0.003 cents per coin. In October 2017, the coin's price rose to US$4,200 - although this value has seen fluctuations, with frequent swinging daily movements. At this time, hundreds of other virtual currencies have appeared, each with its own advantages and applications. However, few of these currencies have significant value, but Bitcoin has competitors in the form of Ether and Bitcoin Cash, in addition to Litecoin to a lesser extent.
Commodity or currency?
Bitcoin was initially created as a payment method, and in some specific cases it works exactly as intended. However, it lacks widespread distribution, in addition to the fact that it is currently witnessing a state of great fluctuations to be considered a real alternative to paper currency: sellers need to constantly review their prices to deal with fluctuating movements in its value.
This means that Bitcoin is primarily used as an investment similar to gold and other precious mtals, rather than a traditional currency. Like commodities, currency transcends the direct influence of a particular economy and is not significantly affected by changes in monetary policy.
Remember that while Bitcoin is not affected by many of the factors that affect traditional currencies, there are a number of unique influences to consider.
How does Bitcoin work?
Bitcoin needs two basic mechanisms to work: blockchain data and the mining process.
Blockchain data is a shared digital record consisting of all Bitcoin transactions executed up to this point. These transactions are grouped together in 'buckets', secured by cryptography during mining operations, and linked to each other.
The blockchain data can be accessed by anyone at any time, and it can only be changed based on the will and computing power of the vast majority of the network. This means that it is almost impossible for retroactive modification to occur, meaning that you will not fall victim to human error and there is no Single point of failure.