Bitcoins are digital, cryptocurrency that have made waves throughout the past several years given the unprecedented amount of autonomy that they give to currency holders. Not everyone understands just how this currency works. In fact, most people don’t. If you have a number of basic bitcoin questions to ask, you’re certainly not alone. For instance, you might be wondering just how many bitcoins exist, how they’re mined, and how they’re spent. Following are a few facts about this currency that all consumers should know.
The financial world in general can be exceedingly complex, especially once you move beyond standard, paper currency and coins. There is an unlimited number of options in trading and modern consumers also have the benefit of digital wallets or wallets that mask their personal information such as actual credit card numbers whenever online transactions are completed. Surprisingly enough, however, bitcoins do not fall into this category. Instead, these coins are digital currencies that are encrypted for both the protection of their legitimacy and the overall security of the bitcoin system. These coins are incredibly popular, especially among people are interested in keeping the largest portion of their monies protected from prying eyes and from potential economic disaster.
One thing to note about this currency is that it is in no way controlled by a single entity. This goes against all standard notions of cash. Paper money is controlled by both the government and the banks in many locations. As the value of paper money rises and falls, the general public is notified. Moreover, paper money is tangible and something that consumers can actually hold in their hands. These are all things that digital, cryptocurrencies of the bitcoin variety are not.
While it might seem like there could be an endless number of bitcoins, there is actually a very specific and finite number. To date, there are no fewer or less than 21,000,000 bitcoins. Much like paper money, however, the value of these can rise and falls. The very fact that the cryptocurrency has a finite number is what preserves the value of this monetary system.
Rarity always increases the value of things. Whenever demand exceeds supply, values go up. Given that new bitcoins are mined every minute, the number of remaining bitcoins that are available for claim continues to decrease. As of early 2016, 15.2 million bitcoins were already in circulation. At that time, this meant that just 4.8 million bitcoins remained unmined and unclaimed.
There really isn’t a set value for this currency. In fact, it only has any worth in sales or trades among people who are willing to accept them as an actual currency. Given that the system is incredibly popular, however, there are lots of large and small businesses that are willing to take it for payment, just as there are many private parties who are willing to barter and sell with bitcoin. These coins are little more than pieces of digital code. However, each time the system gains popularity, the value of each coin invariably increases.
One thing that people love about this system is the fact that it is completely transparently. Anyone who completes a transaction can see every other transaction that has been completed, given that these are all written into the every growing and changing, bitcoin code. While you won’t see the names and locations of the people who have completed each transaction, you will have sufficient transaction information and amounts to sate your curiosity. This is to ensure that all members of the community have a strong sense of both security and trust.
Coins can obviously be mined. Unlike mining for gold, however, this process involves the solving of mathematical problems via a special computer program. By doing so, you are basically verifying different transactions that have occurred throughout the world while creating a new line of encrypted code that represents the history of all bitcoin transactions plus the new ones that you have verified. A specific number of bitcoins are awarded to each person who is capable of solving these mathematical problems in a way that the bitcoin system will accept.
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