Bitcoin is the largest cryptocurrency by market share and market cap. By utilizing digital currencies, such as Bitcoin, people are able to exchange value without the need for intermediaries...
As opposed to government-backed currencies, Bitcoin has no central authority and relies instead on a peer-to-peer network of computers around the world running software which validates transactions and records them in a public distributed ledger, known as a blockchain. The Bitcoin blockchain, is maintained by the entire network of users, rather than a centralised institution such as a company (like PayPal), bank, or government. This process means you can send Bitcoin anywhere in the world privately and securely.
Like other currencies, products, or services within the economy, Bitcoin and other cryptocurrency prices depend on perceived value, coupled with supply and demand. If people believe that Bitcoin is worth a specific amount, they will pay it, particularly if they think it will increase in value. However, as a nascent technology, there are many who yet dispute whether it has any true value. A combination of these two factors has led to many people debating the true value of 1 Bitcoin.
By design, there will only ever be 21 million Bitcoins created. The closer Bitcoin gets to its limit, in theory, the higher its price will be, as long as demand remains the same or increases.Find out what is the current BTC to GBP value with our handy Bitcoin to GBP converter below.
Bitcoin is created through a complicated process called 'mining', performed using sophisticated hardware that solves an extremely complex computational math problem. 'Miners' are paid in bitcoin for completing this task. There is also an element of luck, as the first miner to come up with a 64-digit hexadecimal number (or "hash") is the one who is rewarded. This makes solo mining largely unprofitable and rewards for mining on ones own are, at best, sporadic. This has lead to 'farms' and mining 'pools' being established.
'Farms' are where multiple computers, owned by a single entity, work together to 'mine' Bitcoin. In recent years, Bitcoin mining has been outlawed in China, meaning the majority of 'farms' are now located in the USA.
'Pools' are when multiple people or groups of people work together and share the rewards from mining.
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