- Bitcoin is a form of digital currency or virtual currency created and held electronically.
- It is not regulated by any central bank or government.
- They aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
- It is also called a “cryptocurrency” since it is decentralized and uses cryptography to prevent double-spending, a significant challenge inherent to digital currencies.
- Bitcoin is a distributed peer-to-peer digital currency that functions without the inter-mediation of any central authority.
- It can also be traded on an open market and its exchange rate fluctuates much like a stock market i.e. based on the demand.
Why are Bitcoins popular?
- Bitcoins continue to remain attractive as a store of value.
- A major reason seasoned speculators find bitcoins irresistible is its deflationary nature, which makes it inflation-proof. Since there can only ever be 21 million bitcoins, unlike a fiat currency, it cannot suffer a loss in value due to inflation.