Bitcoin is a digital currency, called a cryptocurrency. It is traded online and can be used for physical and digital goods at retailers who accept the cryptocurrency. Bitcoin is famous for its price fluctuations which have attracted investors and gamblers alike. The cornerstone of Bitcoin is blockchain technology. Blockchain technology is a complete set of data which is distributed to all users of bitcoin which gives transaction amounts, times, and accounts. This provides the most accurate record of transactions, keeping millions of copies of data. The blockchain provides much of the investment faith in the cryptocurrency. Bitcoin is released in 10 minute intervals to users who are actively “mining” for Bitcoin.
Bitcoin mining involves the use of raw computational power to solve complex equations. The rate at which Bitcoins are mined is called the hashrate. Bitcoins are released in blocks of complex equations, which would take an extremely long time to solve independently. To solve this, users have created mining pools to share computational power and distribute bitcoin rewards proportional to hashrate.
Amateur bitcoin enthusiasts generally face the issue that it is difficult to invest at a young age, or too expensive. To capitalize on this, cheaper cryptocurrencies have popped up, many of them being seen as jokes, an example being dogecoin. Bitcoin faucets have also been created to give a small quantity of satoshi, or millionths of a bitcoin for watching advertisements. The amount of money made this way is negligible, but has created a new market for mass advertising.
In its current state, the price fluctuations of bitcoin are based on their desirability. Since bitcoin’s start, the standard block reward of 50 bitcoins has halved twice. In 2020, it is due to halve again. This algorithmically limited supply has significant effects on the price. While some think it will raise the price, due to a lower supply and similar demand, others think that as the rewards lessen, mining will be less profitable and interest will drop, lowering the price.
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