Bitcoin is a digital currency – It is a form of money stored in an owner’s online “virtual wallet”, free from the control of governments or central banks.There’s an inbuilt algorithm which determines the number of Bitcoins in circulation at any given point in time.The cryptographic technique that Bitcoin is based on is the same type used by commercial banks to secure their transactions.The idea is that you use cryptography to control the creation and transfer of money, rather than relying on central authorities.
It has been running as a currency have revealed a few flaws which show that Bitcoin is an efficient proof-of-work for transactions which is cheaper and faster than any other method.
The biggest problem was the volatility of Bitcoin prices which exceeded the volatility of other currencies and gold. Because its supply was ultimately limited, prices will need to vary to accommodate shifts in demand, not the other way round. Unlike gold, Bitcoin also has no intrinsic value from alternative uses that could anchor its price.
Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, Bitcoin always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.
You can buy Bitcoins on online crypto currency exchanges or you can earn them through “mining.”