Bitcoin: what it is, how it works and how much BTC is worth

What is bitcoin (BTC)?

We know BTC as the token of the Bitcoin network. It is the first decentralized currency, meaning there is no central entity that controls it, but rather it is produced by people and companies around the world. It has a distinctive feature: its issuance is limited by design to 21,000,000 units. Each BTC can be divided into one hundred million units called "satoshi" in honor of its creator.

It is a currency that does not belong to any state or country, can be used worldwide, and acquired through local currencies. Transactions on the network are completely anonymous, no personal information needs to be disclosed to make exchanges, and, since it is not a centralized network, the money belongs to you 100% as it cannot be intervened by anyone.

Who is the creator of Bitcoin?

In 2008, a software developer (or group of developers) anonymously under the pseudonym Satoshi Nakamoto proposed Bitcoin as a electronic payment method based on mathematical proofs. His idea was to produce an exchange medium that is independent of any central authority, that can be transferred electronically securely, verifiably, and immutably. Once the first version of the software was released in 2009, Bitcoin became a global phenomenon.

The most curious thing? To this day, it is not known who is behind Satoshi Nakamoto, that is, it is not known for certain who created bitcoin.

What is BTC used for?

One of the most common questions when starting to invest in Bitcoin is what we can do with it. Below, we list some of the uses we can give it and what can be purchased with bitcoin:

• Send and receive payments: without hourly or border limits.
• Make transactions for goods and services: many large companies started accepting BTC as a form of payment.
• Works as a store of value: although its price fluctuates, it tends to increase over time thanks to its scarcity.

Main characteristics of this cryptocurrency

As mentioned earlier, this cryptocurrency has certain characteristics that make it unique and position it at the top of the market. These characteristics are decentralization, transparency, and value determined by demand. Let's see what each of them is about.

Decentralization

This is the most important characteristic of Bitcoin. In the network, there is no central entity, unlike traditional currencies, but rather the network's own users are responsible for producing new coins and ensuring the correct operation of the network. This characteristic allows each user to have full control over their money, without their account being frozen or seized, allowing transactions to be made at any time and from anywhere.

Transparency

Although it is not necessary to provide any personal information to transact on the network, these transactions are visible on the blockchain for anyone who wishes to observe them, which is why we say the network is transparent. Again, we will only see transactions and input and output addresses, we will never see personal data of the people or companies that send and receive them.

Value determined by demand

No one determines or sets the value of a BTC, but it is given by the market's supply and demand. If demand increases, the value will increase consequently, and if demand decreases, the value will tend to decrease as well. Also, it is worth noting that this is a consequence of its limited issuance: a scarce good tends to increase in value, so if more people want to obtain a BTC, its value will increase because not everyone will be able to do so.

How do bitcoins work?

Comparing with the traditional system, we can say that the network works in a similar way to any bank account: users store BTC in a digital wallet and have full control over their holdings to send or receive from other addresses. Likewise, this address will be used to receive BTC and not any other type of currency, be it digital or physical.

The Bitcoin network consists of interconnected computers (known as nodes) with internet connection that perform various functions, including confirming the transactions that occur on the network.

How are bitcoins produced?

Those in charge of producing new BTC, among other functions, are the so-called miners. To do this, miners connect specialized equipment to the network in order to solve mathematical calculations, and whoever succeeds in doing so will receive new BTC as a reward. The network's code stipulates that a new BTC must be created every 10 minutes, no more and no less time.

If you are wondering how to generate bitcoins, then we have good news: anyone in the world can become a miner on the network, you only need specialized hardware and software to connect to the network.

How to make money with Bitcoin?

Many people see Bitcoin as a great opportunity to generate profits in the medium and long term, while others see it as a way to safeguard their savings. The reality is that, whatever the goal, this cryptocurrency allows each person to adapt it to their needs. Let's review some of the most common methods.

Bitcoin Holding

In cryptocurrency jargon, the term "hodling" is used to refer to the action of acquiring BTC and storing it in a wallet so that, over time, it appreciates. This is a very popular action within the Bitcoin world. Logically, the idea is not to dispose of it, not to sell the holdings until they reach the desired value.

Bitcoin Mining

One of the options to generate profits is to acquire BTC directly. For this, it is necessary to become a miner, actively participate in the network to be able to get a reward for this work. To do this, you need to acquire specialized mining hardware, get software to connect to the blockchain, connect the equipment to the power supply, and have a stable internet connection. In this way, we will get BTC without the need to directly acquire it. It's worth mentioning that, although the rewards for solving blocks are high, the costs of the necessary equipment are also high.

Bitcoin Prediction

When we say "crypto prediction," we are referring to the action of speculating on the rise or fall of cryptocurrency prices to make decisions based on it and be able to make a profit. Generally, these desired gains have more to do with the short term.

Advantages and disadvantages of Bitcoin

This new way of transmitting value has many benefits for users. It is a very disruptive technology that will surely imply a change in the financial system as we know it now. Although its advantages are much greater than the disadvantages, it is not wrong to review both.

Advantages of Bitcoin

• Transparency and neutrality: anyone can see the transactions, and nobody is above anyone.
• It is international: it does not depend on any government or state, so we can use it anywhere in the world.
• Freedom to send and receive payments: we can do it at any time of the day and without geographical limits.
• Less risks in payments: transactions are secure, irreversible, and do not contain personal data.
• Security and control: users have full control over their operations, so it is impossible for anyone to force unwanted charges.
• It is scarce: its issuance is limited. When a good is scarce, its value tends to increase.

Disadvantages of Bitcoin

• Volatility: the price changes constantly, and sometimes, the rises and falls can be abrupt.
• Not accepted in all businesses: although adoption is growing rapidly, the market is not yet large enough to be universally accepted.
• Losing your key is not an option: Losing access to your wallet implies losing all your holdings.
• Internet connection is a necessity: although the internet is present worldwide, we may still encounter this impediment to transact.

Historical quotation of Bitcoin: BTC price statistics

Bitcoin has only been around for just over a decade, but still, its quotation has had many modifications. From the launch of the network in 2009 until today, the evolution of the price of Bitcoin has been simply spectacular, going from being literally worth nothing to reaching $69,000 per unit. This tremendous evolution allows for a more than positive projection regarding its value in the future.

Bitcoin Projection

As mentioned earlier, the projection on the value of BTC is more than positive and allows for dreaming big. Beyond its monetary value, those of us within this world know that blockchain technology is so disruptive and has so many advantages that we know that sooner or later it will begin to be adopted in various fields, not only in the economic one.

Bitcoin Argentina - Frequently Asked Questions

How can bitcoins be obtained?

We can mine them or acquire them on platforms like Satoshi Tango, where you can do so using your local currency.

What is the minimum amount to invest in bitcoin?

At Satoshi Tango, you can invest in Bitcoin starting from 1,500 Argentine pesos.

How to start trading with bitcoins?

Trading on Satoshi Tango is easy, fast, and secure. Download our app, register, load funds into your account, and start trading with Bitcoin.

What is the safest platform to buy bitcoin?

At Satoshi Tango, we provide access with biometric data, a second factor of authentication, and password analysis to make investing in crypto even safer.

What is the Bitcoin white paper?

A white paper is a document written by the creator of a project detailing all the relevant information about it. Thanks to these documents, we can inform ourselves to decide whether to invest in a project or not.