So, What exactly is a Bitcoin (BTC)?
Bitcoin is a form of digital money which has no physical form. It is designed to be decentralised, borderless and censorship resistant.
Unlike traditional fiat currencies (pound, euro, dollar, etc) bitcoin not issued by any government.
Instead, it was released as open source software that anyone with a computer, tablet, or smart phone can easily participate in.
Bitcoin was the original and still the most well known cryptocurrency. It is designed to work like digital cash and be used peer-to-peer.
As there are no banks, or third party ‘payment processors’ Bitcoin transactions are very cheap and fast when compared to traditional means of money transfer.
Bitcoin transactions are also totally permissionless, this means that anyone can transact with anyone else anywhere in the world without the permission of banks or governments. This has huge potential for a large proportion of the world population who live with failing economies and authoritarian leaders.
Since the first bitcoin was mined in January 2009 there has been some amazing innovation within the space, an example of this is layer 2 scaling solutions. Lightning network is a layer 2 that uses payment channels to allow payments to be settled instantly and for free. Huge steps are constantly being made to continue to innovate and make bitcoin a currency for everyone.
The short video below explains in slightly more detail how the Bitcoin network works and how transactions are validated.
Whilst bitcoin is a fantastic currency and payment solution for the world, there are many other cryptocurrency projects that have very different use case. One of which is Ethereum, this is a decentralised virtual machine capable of running code and executing digital contracts without any intervention from a trusted party.
Today, there are thousands of cryptocurrencies in circulation. Cryptocurrencies which are not bitcoin are often referred to as alt coins, (or by some people very passionate about bitcoin, these projects also get called s%#tcoins). There are some great resources to learn more about alt coin projects, we recommend checking out upfolio.com for a great summary of some of the more common ones, and messari.io for a more comprehensive list.
Whilst some of these have real potential, genuine use case, and some fantastic developers and programmers working on them, a lot have no real purpose and may even be scams. Its important to do your own research before investing in any cryptocurrency.
Buying cryptocurrency as a speculative investment is high risk, NEVER INVEST WHAT YOU CAN’T AFFORD TO LOSE.
Below we have listed a few more detailed resources which contain lots of free information ideal for anyone new to cryptocurrency. (Note: We are not affiliated with any of these sites).
https://academy.binance.com/en/start-here
https://coinmarketcap.com/alexandria
https://www.coinbase.com/learn