What is Bitcoin?
Bitcoin is a cryptocurrency used as a medium of exchange and storage of value. Bitcoin was inspired by earlier cryptocurrencies like Hashcash and b-money, which were invented as early as 1997 and are cited in Bitcoin documents.
The name Satoshi Nakamoto has been associated with the original white paper that was released in 2008, although a specific person has never been positively identified as the inventor of the Bitcoin. Bitcoin software was released soon after the white paper, in 2009.
As a cryptocurrency, Bitcoin is not controlled by any country or central bank, nor is it backed by any underlying asset, such as gold. Rather, Bitcoin is a digital currency controlled by a peer-to-peer system comprised of many nodes (separate computers), that verify and authenticate transactions before they can become part of the transactional record.
This record is a digital, public ledger known as a “block chain.” The creation of new, authentic Bitcoins only occurs when individuals (Bitcoin “miners”) earn them by maintaining the transactional record of the currency.
How Does Bitcoin Work?
The value of Bitcoin is derived from its popularity as a medium of exchange and storage of value, which is a function of its cryptography, i.e., encrypted security, that protects it from theft, counterfeiting, and devaluation. Devaluation by inflation is one of the biggest threats to any currency or storage of value.
For example, governments and central banks have the authority to print more money to pay off debts, fund existing programs, or start new ones. However, printing more money increases the money supply, creating the potential for inflation and devaluation.
Bitcoins, on the other hand, cannot be arbitrarily created. Rather, new Bitcoins can only be created by the process described above, which limits the number of new coins, and therefore, theoretically, prevents currency devaluation, manipulation, and fraud.
How to Trade in Bitcoin ?
Speculators and investors can trade Bitcoins on spot, futures, and options markets. Brokerage accounts provide access to each of these markets with features similar to other currencies and contracts, including margin trading and short selling.
Like currencies in the foreign exchange market, any price quoted is a rate of exchange. The rates are the value of one Bitcoin expressed in units of another currency. For instance, if the price is BTC/USD $15,510.9, then 1 Bitcoin can buy $15,510.9 U.S. dollars, and $15,510.9 can buy 1 Bitcoin.
Bitcoin is not a fiat currency: it is not legal tender and cannot be used to pay Federal taxes in any country, however, some online and brick-and-mortar merchants accept them as payment for goods and services. Private transactions can include Bitcoins, and gambling establishments may accept Bitcoins.
Bitcoins are even available at some ATMs around the world. Storing Bitcoins requires an online wallet like Coinbase, which is also used for transactions.
Technical analysis features are available through the charts. The columns in the table of historical data are sortable, and downloadable data can be restricted by start and end dates.