Bitcoin is a digital form of money, but unlike the conventional fiat currencies that we are all so used to, it is not under the control of a central bank. Instead, the backbone of managing Bitcoin's financial system is thousands of computers distributed around the world. Anyone can participate in this ecosystem after installing certain open source software.

Bitcoin was the first cryptocurrency to be announced in 2008 (and launched in 2009). It provides users with the ability to send and receive digital money. But the main quality that makes this currency so attractive is that it cannot be censored, funds cannot be spent more than once, and transactions can be made at any time and from anywhere.

Why use Bitcoin?

People use Bitcoin for a number of reasons. Many people value the first cryptocurrency for its inclusive nature (from the English permissionless), i.e. anyone with an internet connection can send and receive these coins. It is somewhat similar to cash because no one can stop you from using it, and this advantage of these funds in the digital environment means that with the help of bitcoin you can exchange currencies around the world.

What Makes Bitcoin Valuable?

Bitcoin is decentralized, censorship resistant, secure and unlimited.

The latter quality has made it extremely attractive for use cases such as international money transfers and payments (remittance), provided the user is unwilling to disclose their personal information (as is the case with a debit or credit card).

Instead of spending their bitcoins, many people choose to store them for a long time (also known as hodling). Bitcoin has been nicknamed "digital gold" due to the limited number of coins available. Some investors see Bitcoin as a store of value. The reason for this was the presence of such factors as: scarcity and complexity of production, it is also often compared to precious metals such as gold or silver.

Holders believe that these qualities, combined with global affordability and high liquidity, make it an ideal vehicle for preserving wealth over extended periods. They believe that the value of bitcoin only continues to grow over time.

How does Bitcoin work?

When Alice creates a transaction to Bob, she doesn't send funds the way you expect. This has nothing to do with the digital equivalent of giving him a dollar bill. It's more like Alice is writing on a piece of paper (which is available to everyone for review) that she is giving Bob her dollar. When Bob sends the same funds to Carol, she can see that Bob has money by looking at the transactions recorded on the worksheet.

This sheet is a special kind of database and its name in the bitcoin system is blockchain. All network participants have copies of such a database, which are stored on their devices, and they also constantly contact each other to synchronize new information.

When a user makes a payment, he broadcasts it directly to a peer-to-peer network, which is not a centralized bank or remittance processing institution. To add new information, the Bitcoin blockchain uses a special mechanism called mining. It is thanks to this process that new blocks of transactions are recorded as records in the blockchain.

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