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Adecentralized currency and payment system, Bitcoin operates independently of a government or central bank.
Understanding Bitcoin
Bitcoin is the name of the worlds first, and still most recognizable cryptocurrency.
What Does BTC Mean?
BTC is the ticker symbol under which Bitcoin trades.
What Are Bitcoins For?
Here are some of the ways Bitcoin has proven to be useful.
Blockchain Technology
Bitcoin introduced the world to blockchain technology.
Unliketraditional fiat currency, governments and central banks dont issue and regulate Bitcoin.
Those who perform this essential maintenance are called miners.
Because of theanonymous, decentralized natureof cryptocurrency, security is of the utmost concern.
Investing in Bitcoin
Some people use Bitcoin as a currency and payment system.
Others invest in it to make a run at grow their wealth.
The most popular include:
Some brokerages also offer Bitcoin trading, including Fidelity and Robinhood.
It can be 10 times more volatile than safer bets like bonds.
Advantages and Disadvantages of Bitcoin
Heres a look at theprimary benefits and drawbacks.
Advantages
Bitcoin emerged from a free market philosophy that sought the democratization of currency.
Its many advantages include transparency, security, relative anonymity and the potential for high returns.
Also, its decentralized structure is resistant tomanipulation and censorship.
Disadvantages
Bitcoin, however, is not without its drawbacks.
The PoW model requires the endless running of energy-hog computers that consume vast resources and create an environmental hazard.
Also, legal and regulatory uncertainties cloud the industry.
Bitcoin vs. Other Cryptocurrencies
Bitcoin is so dominant that its literally in a class by itself.
All of the thousands of non-Bitcoin cryptocurrencies despite their many similarities with BTC are known as altcoins.
Some of the biggest are Ethereum, Binance Coin, Litecoin and Tether.
One of the primary differentiators is the consensus mechanism used to validate transactions.
Bitcoins PoW mining mechanism is a labor-intensive process thats slow and energy-inefficient.
Mainstream Adoption
In a year-end retrospective, Forbes called 2024 the year that took BTC mainstream.
Technological Advancements
Rapid advancements ininfrastructure and technologyhave helped Bitcoin break into the mainstream.
It serves as a currency, but Bitcoin is more than just a medium of exchange.
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