What Is Bitcoin?

Bitcoin is a virtual currency with which payments can be made, also known as cryptocurrency. This digital currency makes it possible to carry out transactions between themselves, without the intervention of a third party such as a bank or a party like PayPal. The digital currency is known to regularly change value: the bitcoin price fluctuates daily.

Bitcoin uses a decentralized payment network in the form of a general ledger. We call this ledger the blockchain. Anyone with a digital wallet, also called a BTC wallet, can carry out transactions that are recorded on the blockchain. Transactions are added to the blockchain in groups, which we call blocks. Such a ledger therefore basically consists of a chain of blocks with transactions, hence the name block-chain.

The beauty of this technology is that the bitcoin blockchain is not a specific file that is centrally stored at a company: instead anyone who wants to, can install a full bitcoin wallet, which then saves a copy of the blockchain. That is how it works, every device in the network is always aware of all transactions that have taken place.

Buying Bitcoins should not only be done because you have seen that the Bitcoin price continues to rise: although the price increase of bitcoins is of course very interesting and attractive to take part in, we think it is important that you are actually up to a certain level, understands what the technology does and have confidence that more people and companies will (want to) use it.

The cryptocurrency Bitcoin, abbreviated BTC, can be used as a means of payment for a large (and still growing) number of products and / or services. Just like traditional currencies like the Euro, BTC should be stored somewhere. For that you need a (digital) wallet, also called a Bitcoin wallet. From this BTC wallet, often in the form of a (mobile) application or website, you can make payments to other people or organizations with a Bitcoin wallet. Identification is done on the basis of Bitcoin address.

A transaction in cryptocurrency is very simple, fast and cheap. For example, if you now transfer 1 BTC to someone in Australia, the person will receive it within a few minutes. Because the decentral Bitcoin network (the blockchain) confirms the transaction instead of a central authority such as a bank, there is no question of long waiting times or high transaction costs. Moreover, the security of the transaction is guaranteed by the blockchain.

Since the arrival of the digital currency in 2009, the value of this has increased enormously. The Bitcoin share price is, as with all other currencies, determined by supply and demand. If the demand for Bitcoins and the confidence in the technology increases, the value automatically increases.

The value of the Bitcoin has been rising for years, making the cryptocurrency lends itself perfectly as an investment. Keep in mind that the price fluctuates enormously, so investing in Bitcoin brings risks.

Unlike traditional payment methods, the Bitcoin currency has no inflation: there are up to 21,000,000 (21 million) full BTC units available. Payments do not have to be made in whole units. Every BTC can be divided into 100,000,000 (100 million) units called Satoshi, making the total available quantity of BTC units up to 2,100,000,000,000,000 (2,1 billion or 2,100 billion Satoshi).

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