What is digital currency?
Digital currency is a type of currency available only in digital form, not in physical form such as banknotes and coins.
Different types of digital currency
While there are many types of digital currencies like Ethereum, Monero and Litecoin, Bitcoin remains as the most well-known type of digital currency.
What is Bitcoin?
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. Traditional currency’s value relies on country economic state and overall trust. However, Bitcoin network adopts a trust-less system where trust is built upon networks participants. An overall bitcoin quantity is limited, where the value of bitcoin raises if a majority of people believes bitcoin has value and vice versa.
How does Bitcoin work?
Bitcoin doesn’t go through intermediaries like banks. Similar to cash, bitcoin holders can directly trade bitcoins in person. Every bitcoin transaction history is recorded on a network that is visible to the public as Bitcoin works on a public ledger called blockchain, which holds a decentralised record of all transactions that is updated and held by all users of the network.
How to own Bitcoins?
The easiest way to own bitcoins is by buying bitcoin through a bitcoin exchange. You can also earn Bitcoins through mining. Bitcoin is a decentralized system where there is no specific administrator. The bitcoin network is maintained by multiple anonymous individuals. These individuals are rewarded with an issuance of new bitcoins and transaction fees. Since anyone can earn bitcoin and the process earning bitcoin is similar to gold mining process people call the bitcoin system maintenance “mining”.
Bitcoin transaction is instant where Bitcoin holders have total control of their assets. Bitcoiners can send or receive an unlimited amount of bitcoins 24/7 anywhere. Bitcoin encourages transparency where every bitcoin transaction is stored in the blockchain. Anyone can see the transaction records in real time.