Bitcoin is a digital cryptocurrency developed as an alternative payment system to send money over the internet, just like traditional currencies, but free from any centralized control or supervision by banks or governments.
To achieve this, Bitcoin is built on a distributed digital record called the blockchain and relies on peer-to-peer software and cryptography. Based on the distributed ledger, each transaction is securely documented and transparent to all parties.
Bitcoin exists only in digital form and cannot be kept as a physical coin or bill. To deposit Bitcoins, you need a digital wallet which is either created in the cloud or on a local computer. The wallet is a kind of virtual bank account that you can use to send or receive Bitcoins, store them, or pay for goods and services.
You can buy Bitcoins with regular money on online exchange platforms like Coinbase or exchange them for cash like any other asset.
Investments are often made in Bitcoin in the hope they will increase in value over time. However, the value of Bitcoin follows the principle of supply and demand — and since demand waxes and wanes rapidly, the value of the currency can fluctuate wildly.
Note
Storing Bitcoin is like storing cash, which means you need to protect it from theft and loss.
Secure your cryptocurrencies with Avira Crypto.
Learn more here.