What is bitcoin, why do we need it?

Interest in bitcoin in 2021 is growing as fast as the price of the major cryptocurrency. Since January of this year, the rate has increased by 70%, and at the end of February, the value broke a new record and rose above $57,000. Let’s look into why there is so much buzz around bitcoin, why it is needed and whether it is worth investing in it.

What bitcoin is: in simple terms

Bitcoin is the most popular digital money in the world. Otherwise known as cryptocurrency, it is a software code that is as hack-proof as possible. Bitcoin cannot be cashed in, because physically this currency does not exist. There are only special registries that keep track of how many bitcoins someone has and who transfers them to where. The registries are not stored in banks or payment systems, but are decentralized: on all the computers that hold bitcoins. This means that anyone can see all bitcoin transactions throughout history, and it will be impossible to fake this data. Also, bitcoin is not controlled by the government or any private company. But you can cash bitcoin as fiat using such a card https://cryptopay.me/bitcoin-wallet.

Why Bitcoin is needed

Bitcoin has become a solution for those who have lost faith in central banks, live in a country with a declining economy or an unstable currency. Cryptocurrency allows you to transfer money anonymously and without the involvement of banks. For this reason, bitcoin has become popular in the black market and is used to buy illicit goods and make illegal transactions. But bitcoins can also be used to buy legal things, such as Dell computers in the United States. 

But you don’t have to buy something with bitcoins: you can convert them into a currency you are used to, such as dollars. Or trade bitcoins on the exchange: since 2015, the main cryptocurrency rose in price from $200 to more than 60 thousand, which made it interesting for investors. Bitcoins can also be used for everyday purposes, such as sending digital money to relatives abroad instead of losing money due to currency exchange.

To transfer money and pay for services, all you need to do is to create a bitcoin wallet and set a private password. If you lose that access key, your money is gone forever, because the wallet cannot be centrally restored by calling the bank. In January, a U.S. programmer lost the password to a flash drive containing 7002 bitcoins-the equivalent of hundreds of millions of dollars. Such cases are not uncommon, especially if a person bought the cryptocurrency in 2008, when it was worth little more than a dollar, and did not treat the wallet with due care.

If you want to use your bitcoins and pay for them in a store, you should buy a special bitcoin card. You can find more information here https://cryptopay.me/. People invest in cryptocurrency to increase their savings in the long run. It is a deflationary instrument: every day the number of bitcoins that can be mined decreases, their final number is finite. Therefore, the price will only go up in the long run.