Bitcoin is one of the most popular cryptocurrencies that are no different than the money that you have in your wallet. Similar to the paper money in your wallet, it has no intrinsic value. In fact, Bitcoin has a lot of similarities with gold; the currency which ancient human civilization accepted as real money.
Comparable to gold but unlike paper money, you cannot print Bitcoins. The best thing about Bitcoins is that they are decentralized, meaning that there is no centralized governing body. Neither the bank nor the government have control over Bitcoins which means that they cannot increase the 21 million Bitcoin limit set.
Another similarity to gold – Bitcoins need to be mined. In short, there are complex mathematical problems that miners need to solve in order to get Bitcoins. Behind the scene, miners’ CPU cycles are being used for the purpose of verifying transactions and making sure that everything that is happening on the Bitcoin network is legitimate. Basically, what happens is that the Bitcoin network is arranged in such a way that there is some kind of a lottery that occurs every ten minutes. Any transaction that people make across the internet goes into a block and that block needs to be verified by somebody. That somebody (computer) is the one who solved the mathematical problem and got the Bitcoin.
The value of the currency comes from its demand (popularity) and supply. Bitcoins are one of the most stable cryptocurrencies. The value fluctuates pretty dramatically at times but for the most part it stays pretty stable by comparison and that’s largely because of its adoption. Many big companies around the world accept Bitcoins. One such company is Microsoft – you can buy digital products online using Bitcoins.
Even though some people might see Bitcoins as a ponzi scheme, many people are investing in it simply because the future of Bitcoins look bright.
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I was reading an article about bitcoin right before I read this post. I understood the basic part which it what you explained but I still don't understand how you actually earn it and what it is worth. can you change bitcoin into dollars for example or you can only buy online?
What kind of things to you need to do to win bitcoin?
There are still so many questions to be answered.