Bitcoin: Understanding Cryptocurrency

# Bitcoin: Understanding Cryptocurrency Apr 9, 2021  Bitcoin (or BTC) was launched in 2009 and is regarded as the first cryptocurrency. It’s a decentralized form of digital cash that eliminates the need for traditional intermediaries like banks and governments to make financial transactions. We hope this writeup will provide a brief introduction to cryptocurrencies (or crypto) and its functions. Fiat money (government-issued currency) is backed and regulated by the government that issues it; whereas Bitcoin is powered through a combination of peer-to-peer technology and software-driven cryptography. This creates a currency backed by computer codes rather than items like gold or silver, or by trust in central authorities like the U.S. dollar. The idea of [Blockchain](https://grentone.com/blockchain/an-introduction-to-blockchain/) has contributed to the belief that cryptocurrencies could potentially be safe enough to become a potential alternative asset class. We can buy cryptos through cryptocurrency exchanges, investment brokerages, Bitcoin ATMs and directly from other bitcoin owners (peer to peer). Bitcoins also can be earned through mining, but the technical expertise and cost needed puts this option out of reach for most people. Bitcoins can be stored in a hot wallet which is in the cloud on a trusted exchange or provider, or a cold wallet, an encrypted portable device like a thumb drive that allows you to download and carry your bitcoins. Basically, a hot wallet is connected to the internet whereas a cold wallet is not. But you need a hot wallet to download bitcoins into a portable cold wallet. The value of Bitcoin follows the law of supply and demand — and because demand waxes and wanes, there’s a lot of volatility in the cryptocurrency’s price. Most people purchase bitcoins as a form of currency speculation. It’s worth remembering that picking stocks of established companies is generally less risky than investing in Bitcoin. At this moment, although trading activity has soared tremendously over the past 3 years, not every expert in the market feels that it is an alternative store of value in the future. However, between 2020 to 2021, due to a major attribution due to Covid-19 pandemic global lockdowns, trading activity for most cryptocurrency exchanges has increased tremendously. We provide B2B solutions to new cryptocurrency exchanges or Forex brokers. 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