What is Bitcoin

Bitcoin is a decentralized virtual currency. Bitcoin is not run like the typical currencies - it has no central bank or central organization.

Bitcoin is a kind of virtual currency, commonly referred to as cryptocell, which is mainly used in two directions. The first is payouts. If you have a Bitcoin and you find a merchant who accepts a Bitcoin, you can pay him in a Bitcoin instead of a bank card or other payment service such as PayPal. You may think of a Bitcoin as a financial asset and somewhat as an alternative means of payment. Bitcoin payments provide anonymity - they can hardly be traced.

The other direction is the gains. Bitcoin has a price that is constantly changing. When the cost of a Bitcoin grows, it brings you profit. If the price drops, it brings you a loss. Ie. Bitcoin can be considered a financial asset that can be won or lost. Bitcoin skeptics are convinced that a Bitcoin is a big scam or, at least, a big investment bubble.

In theory, the appreciation of a Bitcoin is set in the way the crypto-wave is created. The number of bits that can be created and used is limited to 21 million Bitcoin. As we know from economic theory, when a resource is limited, its price rises.

In practice, the cost of a Bitcoin, like any other asset, is primarily determined by supply and demand. When there is a great demand, the price rises. When supply exceeds demand, then the price falls. At the moment, the price is rising sharply, and according to most experts, this is due to the speculative buy-out of a Bitcoin. This means that consumers - mainly from Asia - do not buy a Bitcoin to use it for payments, but to gain from its rising cost.

Speculative redemption can be profitable until a certain point: while the cost of a Bitcoin rises. But if the price goes down and you buy a bit in the price peak, then you will suffer losses.

The process of creating a Bitcoin is called "digging". In theory, everyone can dig, that is, to create a Bitcoin as long as it has enough powerful computer and install special digging software on it.

When you run this software on your computer, you generally become something like a mini-block block auditor. By running crotch algorithms, your computer checks the stability of the block and the authenticity of the transactions that take place through it. When you make a certain amount of this work, you receive as a reward 1 Bitcoin.

However, the volume of this work is really great and it is not in the power of a normal computer. The people involved in digging crypto-loudspeakers will tell you that trying to make money with your laptop is not only pointless, but it will also harm of your machine.

The legal status of Bitcoin is so vague and varies in different regions of the world. In most countries, the ownership and payment of Botswana is considered legal, though governments are trying to regulate business by little.

In the European Union Bitcoin is legal, but lately, the debate over the possible regulation or even the banning of the cryptoLight is being momentarily inactive.

There are also countries like Japan, where the state recognizes a Bitcoin as a means of payment.

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