Coin Highlight

Coin Highlight: Bitcoin (BTC)

8 minutes

Recently it is almost impossible to escape Bitcoin's presence not only throughout the financial industry, but also due to its heavy appearance on social media. But not a huge number of individuals actually know how it works or its history. We will be looking at precisely that in this article.

History:

Bitcoin (BTC), was the first cryptocurrency and was created by Satoshi Nakamoto whose real identity is still unknown. BTC was announced in 2008 and released in 2009. Bitcoin allowed exciting new uses through its unique properties that were not covered by previous payment systems.

Using a new peer to peer payment system that did not rely on third party confirmation. Bitcoin aided in the development of decentralisation, disintermediating banks from these transactions. This secure and efficient system known as Blockchain employs mathematical algorithms to confirm transactions without using a central authority. Transaction management and the issuing of Bitcoins is carried out collectively by the Blockchain network.

Purpose:

Bitcoin's main purpose is to operate as a decentralised global payment system. This means that people are able to send and receive funds locally or internationally, without needing to use a third party (such as a bank or payment provider). Bitcoin is often referred to as a 'Store of Value' like precious metals because it is scarce and hard to produce. These characteristics are appealing to investors. Some may argue Bitcoin's purpose is to pave the way for new cryptocurrencies and the innovation of blockchain technology in our world today.

Features:

Bitcoin is an efficient way of transferring money over the internet and is controlled by a decentralized network with transparent rules, presenting an alternative to central bank-controlled fiat currency.

Bitcoin utilises the proof-of-work (PoW) algorithm to verify it's network. Meaning that new tokens are created by “mining”. Mining being the “work”, it is the process of adding valid blocks to the blockchain and minting new Bitcoins.

Scarcity is ensured as there is a maximum supply of 21 Million Bitcoins and all Bitcoins are expected to be mined by 2140. This number is further decreasing which in return increases the value of Bitcoin commonly granting it the name of 'Digital Gold'. The further growing scarcity of the asset is partially due to the Bitcoin Halving which takes place once every 210,000 blocks mined (about every 4 years). The Bitcoin Halving reduces the rewards gained for mining a block until all Bitcoins are mined.

How does Bitcoin compare to the overall crypto market?

Bitcoin dominates the entire cryptocurrency market, on average making up over 50% of the entire Market Capitalisation. To provide some insight for comparison; Ethereum, the second largest cryptocurrency, only makes up roughly 15% of this total.

Under the hood:

Bitcoin operates with the SHA-256 algorithm, which is a set of cryptographic hash functions. SHA-256 requires Bitcoin miners to gain computational hardware in order to validate and mine Bitcoin blocks. The extensive use of this hardware creates the debate about Bitcoin being sustainable for our future, recently the Bitcoin mining community has shifted to cleaner energy sources and in return over 50% of Bitcoins are mined using renewable energy.

Taproot is Bitcoin's first upgrade in 4 years which will change the way Bitcoin's scripts operate. Increasing overall privacy, security & efficiency of transactions. The upgrade will reduce the amount of data stored on the blockchain leading to more transactions per second, a current flaw in Bitcoin.

Applications:

Bitcoin is a viable option for peer to peer payments, and posing as an alternative to traditional bank services, especially when sending funds internationally. Many large corporations have already acted or announced their plans to accept Bitcoin as a means of payment solution.

Recently one of the largest applications of Bitcoin happened in El Salvador, where the population has little access to intermediaries such as banks. Bitcoin provided a new means of payment for their country allowing quick peer to peer transactions on its Lightning Network.

How to Buy Bitcoin:

If you're wondering how to buy BTC? The easiest way to buy Bitcoin in Australia is through CoinSpot; Australia's largest cryptocurrency platform. Once you have created a free account you will have access to your very own Bitcoin Wallet plus over 300 other cryptocurrencies and their corresponding wallets. Using CoinSpot you can instantly purchase Bitcoin and it will reflect into your wallet instantaneously. There are multiple ways you can purchase Bitcoin other than our Instant buy/sell; these options are the CoinSpot Markets, Over the Counter (OTC), Recurring Buy & Swap which allows you to directly trade Bitcoin with other cryptocurrencies.

For step by step instructions on how to buy Bitcoin and other currencies on CoinSpot, you can visit our Help Center here or contact our friendly support team!

Share this article