Bitcoin is the first worldwide decentralized crypto currency and digital payment system called digital currency, as the system works without a central repository or single administrator. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a crypto currency wallet, most of them using bitcoin.
The main difference about Bitcoin from normal currency is that it is decentralized, meaning no single person or institution has control over the network. This makes many people feel better knowing that a large bank cannot control their money. More and more companies are accepting Bitcoin as a payment method every day, mainly because transaction fees are much less, usually at most 2% and as little as 0%.
The only way a Bitcoin transaction can fail is due to human error. To transfer funds you use a wallet address which is a very complex strands of letters and numbers. If you enter the wrong address or the wrong payment amount, that is the only thing that can cause a Bitcoin transaction to fail.
The most common places to purchase Bitcoin here in the USA is thru websites such as Coinbase and Kraken. Both sites are very easy to use and allow you to link your bank account or credit card in order to purchase Bitcoin. Alternatively, you can mine Bitcoin using mining machines to generate Bitcoin.
Bitcoin mining begins with computers called miners. These miners use their processing power to solve complex math equations. They verify transactions and decrypt blocks of newly released Bitcoin. As a reward for solving these equations, they are rewarded with a certain amount of Bitcoin in return, which in turn can be exchanged into US dollars.
Yes! Bitcoin has been consistently increasing in value over time and shows no signs of slowing down. The more Bitcoin you can mine, the more valuable it becomes when the Bitcoin value increases. If you had $100 worth of Bitcoin in 2010 and held on to it until today, your $100 would be worth $75,000,000.