Bitcoin works in the same way as most other currencies except for the fact that is can only be used online. The currency was first introduced in 2009 by Satoshi Nakamoto. There are no intermediaries needed when payments are made with Bitcoin as it is a peer to peer system. You are able to send bitcoin directly to anyone else regardless of where they are in the world.
You are able to mine your own Bitcoin if you have access to a computer that has enough processing power. You can also purchase it from someone else that has mined it but this will cost you money.
Bitcoin (BTC) is still a fairly new currency but this has done nothing to deter its popularity. More and more people are mining and trading it every day and this is a trend that is showing no sign of slowing down. There are also several major companies that now accept it as a form of payment.
As there is no central bank that controls Bitcoin this also means that it is not controlled by any government. This is one of the reasons why Bitcoin always remains so stable. It is not influenced by anything that is happening politically and its success does not rely on the success of any particular government. If you are thinking of investing in any currency then all of these reasons make Bitcoin a good choice.
Bitcoin was invented to give users control over their money. To create a bitcoin, you have to solve complex algorithms using your computer. However, the process involves the computer processors working hard and using a lot of electrical power to generate a bitcoin. The generation of bitcoin is done over the bitcoin blockchain. Therefore, people opt to buy bitcoin because it is easier than mining. However, since people started buying bitcoin, the prices have shot upwards at an alarming rate making one wonder whether it is worth investing in bitcoin.
As earlier mentioned, bitcoin was created to help individuals have power over their money by reducing the number of times one would need to transact using our financial systems. With bitcoin usage, the middlemen were to be eliminated and prompt people to make use of peer to peer transactions. In reality, peer to peer transactions are fast and are done merely on a trust basis. However, contrary to the expectations of the bitcoin inventors, the cryptocurrency records some of the lowest speeds in a transaction. Litecoin which is the fifth biggest cryptocurrency and a competitor to bitcoin is doing better regarding speed and effectiveness. Bitcoin transactions are four times slower than Ethereum transactions.
Bitcoin is also likely to experience less adoption by upcoming investors because of its volatility. The prices of bitcoin fluctuate in minutes. At one point the rate could be high, and in the next minute, it has gone down by several hundreds of dollars. Often, the outcome is that the less experienced bitcoin investors will most likely sell out of panic. Consequently, they will incur losses. In the long run, most people will fear to invest in bitcoins, and therefore, the form of payment will not be adopted as fast and by as many people as possible.