What is Bitcoin (Bitcoin/BTC)?
Bitcoin (Bitcoin/BTC) is the world’s first cryptocurrency designed to run on the blockchain in a decentralized manner.
Unlike traditional currencies, Bitcoin can serve as a store of value and a means of digital payment without the involvement of an intermediary like a bank or financial institution.
The currency symbol of Bitcoin in the market is BTC.
As the originator of digital currency, Bitcoin has gained widespread attention and use from users around the world once it was issued.
In 2021, the Republic of El Salvador became the first country in the world to adopt Bitcoin as legal tender, further increasing its acceptance as an alternative to government fiat currency.
While the concept of digital payments has been around for many years, Bitcoin remains unique for its decentralized nature.
Compared with relying on traditional financial infrastructure, Bitcoin transactions are carried out on the blockchain on a peer-to-peer (P2P) basis, so there is no need for intermediary agencies to intervene.
Bitcoin’s blockchain uses a distributed ledger rather than a centralized ledger or database.
This model not only eliminates the risk of a single point of failure, but also enhances Bitcoin’s ability to resist external attacks. In addition, the decentralized design of the blockchain also makes digital payments faster and more efficient.
Also, its US-based non-profit organization, the Bitcoin Foundation, coordinates relations with and works with the government to increase encryption awareness and currency adoption. At the same time, it is also responsible for dealing with any negative reputational impact suffered by Bitcoin.
If you want to know more about Bitcoin, you can find it on the KuCoin blog.
How does bitcoin work?
Bitcoin provides a unique payment network powered by blockchain technology that is fully transparent and decentralized. Its distributed ledger technology enables all participants to see transactions taking place within the network.
Every bitcoin transaction is recorded in the blockchain in an encrypted and immutable manner. The storage period of these transaction records is permanent, and the transaction records cannot be tampered with before being approved by all nodes in the network. This makes Bitcoin safer and more reliable than traditional payment methods such as fiat currencies or credit cards, which are prone to high-scale fraud.
The mining equipment used by the Bitcoin blockchain has extremely high computing power. They are responsible for validating all transactions that occur within the Bitcoin network and recording transactions into the blockchain by generating new blocks.
The verification process of Bitcoin transactions is commonly known as mining. This process will generate new Bitcoins, thereby increasing the circulating supply of the coins. Since the maximum supply of bitcoins is fixed at 21 million, the difficulty of mining new bitcoins will gradually increase over time. Coupled with the expanding demand for Bitcoin, its value will continue to increase over time.
In order to prevent the “Double Spending” problem within its network, Bitcoin also uses the Proof-of-Work (PoW) consensus mechanism. Double payment, that is, users take advantage of the transaction time difference and try to use the same token in two separate transactions, that is, one coin overpayment. However, the hash value of long can greatly increase the difficulty for users to attempt double spending. This is how the PoW consensus mechanism prevents double-spend fraud within the blockchain.
The History of Bitcoin
Bitcoin’s origins can be traced back to October 31, 2008, when its white paper was published by one or more individuals under the pseudonym Satoshi Nakamoto. In the white paper, it lays out a decentralized and peer-to-peer (P2P) virtual currency that can be used for online transfer payments. Moreover, it also proposes the use of distributed ledgers to record transactions in blocks in an encrypted manner. That technology is blockchain.
Satoshi Nakamoto’s Bitcoin proposal is unique because it combines the principles of security and anonymity with decentralization to create a new bridging environment that supports digital transfer payments. Bitcoin’s underlying blockchain infrastructure enables peer-to-peer payments without system authorization and trust—a key factor in supporting centralized transactions.
On January 3, 2009, Satoshi Nakamoto, the founder of Bitcoin, dug out the first block on its blockchain, namely the genesis block (genesis block), officially launching the world’s first and most popular cryptocurrency – Bitcoin. At the time of publication, the initial price of Bitcoin was $0, but since then as the number of Bitcoins mined and demand has gradually increased, its price has continued to climb.
Fast forward to May 22, 2010, when the first commercial transaction was made in Bitcoin. Computer programmer Lazio Hanyecz bought two pizzas with bitcoin, spending a total of 10,000 bitcoins. Of course, the price of Bitcoin at this time is still far below the current level.
To commemorate the founder’s name, Bitcoin has set its minimum purchase unit as “Satoshi”. Each Satoshi is equal to 0.00000001 BTC, which is one billionth of a BTC.
Over the years, the Bitcoin blockchain has undergone several updates. As of July 2022, the most recent major update to Bitcoin is the upgraded version of Taproot, which will be launched in 2021. This update is the most important upgrade since the launch of Segregated Witness (SegWit) in 2017. Taproot uses a technique called “MAST” to mask private transaction data, thus making Bitcoin transactions more secure and reliable.
The Bitcoin Lightning Network (Bitcoin Lightning Network) is another focus of attention in the development route of Bitcoin. The network is a Bitcoin-based Layer-2 payment protocol designed to improve its scalability and throughput, making Bitcoin transactions faster and with lower transaction fees.
How to buy Bitcoin on KuCoin?
You can buy bitcoins through digital wallets, bitcoin ATM machines, traditional stock market brokers, etc. Of course, which method you choose depends on the situation in each place. However, cryptocurrency exchanges are still by far the fastest and easiest way to buy Bitcoin, as exchanges not only offer lower transaction costs, but also offer more trading and investment opportunities.
Buying bitcoins on KuCoin exchange is fast, safe and easy. The operation steps are as follows:
Quickly create a KuCoin account
You can download the KuCoin app or navigate to the KuCoin.com webpage and follow the process to register a personal account. After logging in, you also need to complete identity verification (KYC) to ensure that you can enjoy KuCoin’s fiat-to-crypto currency services, high withdrawal services and transaction limits.
Buy BTC through KuCoin’s Fast Buy
KuCoin supports more than 70 payment methods such as credit card, debit card, Mastercard, Visa, etc., and supports the purchase of Bitcoin through its Fast Buy channel. In addition, you can also visit KuCoin’s P2P platform to buy Bitcoin. The transaction method depends on the specific situation in each place. For example, citizens of the euro zone can deposit euros in SEPA, and then buy the currency with the euro balance. Before trading, we also recommend that you carefully review important information such as BTC’s real-time price, market value, and 24-hour trading volume.
Third-party sellers may require you to pass a more advanced KYC verification before using the service.
Use cryptocurrency to inject funds and exchange for BTC
You can also deposit cryptocurrencies and exchange them for Bitcoin. The specific operation is: 1. Enter the recharge page and select the “cryptocurrency (Crypto)” you want to recharge; 2. Check the address carefully (because the wrong address will lead to loss of funds); 3. After the cryptocurrency arrives in the account, enter the spot transaction page to find suitable trading pairs to exchange for BTC. If you are depositing USDT or other stablecoins, the conversion process is very simple.
Safely store BTC and earn money with BTC
After the BTC purchase process is over, you can deposit it into your KuCoin account or put it in a cold wallet for a long time. But please also keep your private key information carefully so that you can withdraw funds instantly. However, depositing BTC into KuCoin exchange is still a good choice, because it can create more trading and investment opportunities for you, and let Bitcoin work for you.
The value of 1 bitcoin?
The price of Bitcoin is volatile and has experienced several ebbs and flows over the past few years. On July 5, 2013, BTC once experienced an all-time low of $65.53, but then hit an all-time high of $68,789.63 on November 10, 2021.
But during this period, the price of BTC did not rise all the way. Starting at an issue price of $0 in 2009, the price of Bitcoin rose over the years until breaking through the $2,000 mark in May 2017. 2017 was a year of rapid development for cryptocurrencies, and the price of Bitcoin also soared to $19,345.49 in December of that year.
However, the price of Bitcoin has since experienced a decline, falling all the way to around $10,000 in mid-2019, and further falling to $6,635.84 in December. By 2020, the price of BTC soared from less than US$7,000 to US$29,000 at the end of the year, and reached a record high in 2021, truly pushing Bitcoin and cryptocurrencies into the mainstream of the times.
Since the crypto market is 24/7, the price of BTC/USD is also changing all the time. The above BTC price chart records the market changes of the currency, so that users can keep abreast of the value fluctuation information of the cryptocurrency.
Why is Bitcoin considered bullish?
- Fixed supply
- Since the maximum supply of Bitcoin is fixed, rarity is a factor that drives its value higher. At the time of publication, the founder of BTC has announced that only 21 million BTC will be minted or generated in total.
- Decentralization
- As the popularity of the decentralized cryptocurrency has soared and its trading volume has soared, so has the demand for bitcoin from retail and institutional investors, underpinning its price rally.
- Highest market capitalization
- In addition to a fixed supply, Bitcoin’s reputation as the original cryptocurrency with the largest market capitalization also makes it an attractive store of value, further supporting BTC’s price.
- Rising adoption rate in the crypto market
- In recent months, digital assets such as BTC have attracted the attention of various investors, large and small, and the price of BTC has also risen further. As the application paradigm of the cryptocurrency gradually expands, the investment attractiveness of BTC is also gradually increasing. As a leader in the cryptocurrency market, BTC is also a “star” that almost all investors are eager to hold.
- Hedge against inflation
- Since the COVID-19 pandemic, the direction of global financial markets has also become more unpredictable. Some investors believe that Bitcoin can also be used as a hedge against inflation, calling Bitcoin a money killer – “digital gold”. With the central bank easing monetary policy, frequent stock market fluctuations and more expensive gold, many investors have also begun to adjust their investment direction and attack the Bitcoin market in order to obtain higher returns.
What is Bitcoin Mining?
Mining is the process of creating new bitcoins. The mining rigs required for mining are computers with high computing power, which are mainly used to deal with complex mathematical problems. They are crucial during the Bitcoin mining process to verify all transactions that occur within the blockchain and record them in new blocks.
The KuCoin crypto exchange provides a convenient way to mine Bitcoin through its mining pool. Miners can use this service to contribute their computing power resources, empower the mining hashrate, and enjoy the low mining cost of Bitcoin.
How Much Energy Does Bitcoin Use?
While demand for Bitcoin continues to increase worldwide, concerns about the energy consumed to mine Bitcoin and keep its blockchain running are growing. According to the Cambridge Center for Alternative Finance (CCAF) estimates, the energy consumption of the Bitcoin network is about 110 terawatt hours per year, accounting for about 0.55% of the total global electricity generation. In other words, such a huge amount of electricity can even provide electricity for a small country for a whole year.
Mining equipment is the key support for maintaining all transaction records in the Bitcoin blockchain. The PoW consensus mechanism adopted by the Bitcoin network has very high requirements on the computing power and energy consumption of mining equipment.
However, Bitcoin still has a clear advantage over other industries, because miners can power their mining equipment with more than one energy source, which is not available to the traditional financial industry. To solve the energy consumption problem of Bitcoin, the use of clean energy is also a good way out.
Is Bitcoin safe?
Bitcoin has been designed with security in mind, so its reputation in this regard is also well-known. Its blockchain has not suffered any outages or attacks to date. In theory, there is no way to attack the Bitcoin protocol, but doing so can be quite costly in terms of time and effort.
Having said that, when users store their Bitcoin assets in digital wallets or exchanges, their assets are still vulnerable to external attacks. As more investors enter the crypto market, the number of cybercriminals looking to hack Bitcoin continues to grow. Since 2020, the theft of cryptocurrencies such as Bitcoin from user wallets and decentralized applications (dApps) has emerged one after another, and related fraud and cybercrime have also increased exponentially.
We recommend users to choose a reputable cryptocurrency exchange or broker to buy Bitcoins and store them securely in efficient crypto wallets. If you want an extra layer of security for your bitcoins, using a custodial wallet to control the keys to your bitcoins is also a good option.
What are the ways to invest in Bitcoin?
Currently, there are many ways to invest in Bitcoin, one of the most popular is to buy and hold Bitcoin for a long time. As long as the value of Bitcoin continues to rise, there will be gains in holding the coin, but conversely, if the market crashes, losses will follow. Of course, you can also earn passive income by lending your bitcoins to increase your token holdings.
KuCoin exchange provides a variety of bitcoin investment methods such as spot trading (Spot Trading), leveraged trading (Margin Trading) and futures trading (Futures Trading). You can also lend BTC through KuCoin Earn.
On the other hand, investing in Bitcoin-based ETFs (Exchange Traded Funds, exchange-traded funds) are also good choices. Some financial companies have begun to open this investment product, allowing users to invest in Bitcoin futures contracts. Stock exchanges can also trade Bitcoin ETFs.
Companies such as Grayscale also provide access to Bitcoin by setting up investment trusts, which are quite reliable for large investors. For example, the Grayscale Bitcoin Trust (GBTC) is a publicly traded investment product that allows users to buy GBTC shares. But note that this kind of stock only supports premium trading, which is much higher than the investment cost of buying bitcoin directly on the exchange.
What can you buy with Bitcoin?
Bitcoin is now very popular, and many companies are gradually accepting the currency as a payment method for receiving and paying. In addition to using bitcoin to trade cryptocurrencies on exchanges, the bitcoin lightning network can also be used to pay for goods and services online, as well as to process some offline transactions.
On the other hand, Bitcoin can also replace fiat currency to shop online at retail stores, book trips on travel websites, purchase online services, pay for meals in some restaurants or order food online, etc. In addition, the third-party service platform Amazon also allows users to use Bitcoin to pay for orders.
While Tesla CEO Elon Musk has stopped accepting bitcoin payments, many car dealerships in the U.S. still allow customers to use bitcoin to buy cars, even fancy sedans. Real estate sales that support bitcoin payments are also on the rise.
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Comment by Hans
April 24, 2024
as I am trading here various assets, for me it's the most important feature. i mean, flexibility in tradable markets. i alternate trading styles, meaning that sometimes I trad...