What is Bitcoin?
The world of Bitcoin is enormous and interesting developments occur daily around the largest decentralized cryptocurrency. The number of podcasts, articles, columns, books and other forms of content about Bitcoin continues to expand. We understand better than anyone that this makes it very difficult for beginners to take the first steps in this wonderful world. This page is there to help you with that and give a concise overview of what Bitcoin is.
In 2008, the still mysterious Satoshi Nakamoto published a white paper on Bitcoin, and the rest is history. Bitcoin is seen by many as the first cryptocurrency, but that is not entirely true. Already in the second half of the last century, computer scientists were engaged in the phenomenon of digital money based on cryptography. The problem with all those projects was that they all leaned on a centralized entity. To use these digital forms of money, one still had to rely on the goodwill of other people. Bitcoin is so special precisely because it no longer needs that element of trust. No one needs to trust each other to send Bitcoin from one person to another. Bitcoin is the first form of money that has replaced the element of trust with mathematics.
You don’t have to trust anyone to send Bitcoin from here to the other side of the world. You don’t have to trust anyone to check how much Bitcoin is in circulation and total circulation. No human being has the power to change those rules. That’s what makes Bitcoin so special.
The growing industry around the bitcoin
Until recently, economists, big investors and powerful bankers still laughed at Bitcoin. According to them, it was a fun project for nerds and perhaps interesting for criminals, but Bitcoin would never play a significant role on the world stage. Bitcoin was and still is sometimes compared to a digital tulip bulb, a bubble that can burst at any time. More and more people who initially wrote off Bitcoin as a cute project have to come back to that. For almost twelve years, the digital currency has surprised friend and foe, and the coin comes back stronger after every crash. Over the years, a huge industry has slowly formed around Bitcoin.
Mining is a multi-billion dollar industry.
Meanwhile, hundreds of millions are invested in mining operations around the world. Some of these companies are even already listed on the stock exchange. Bitcoin mining has become a multi-billion dollar industry, and the growth we’ve experienced is not slowing down. On the contrary, change is accelerating. Regarding investments of this magnitude, you can no longer speak of a fun hobby project or a try.
Large corporations and insurance funds invest in Bitcoin.
For years, bitcoiners dreamed of the big money that would pour into the digital currency. For years, the arguments for this were laughingly dismissed by so-called experts. Bitcoin would never be seen as a serious alternative to gold. But the big money flows towards Bitcoin almost twelve years after the first block was mined. It started with MicroStrategy investing several hundred million in bitcoin in August of 2020 and now the business community owns almost 5% of all Bitcoin. Major investment banks are slowly starting to change their minds, and in December 2020, even the large life insurer MassMutual invested $100 million in Bitcoin. These types of parties do not just invest their money; these steps show that Bitcoin has matured and is taken seriously by the big boys.
First, bitcoin banks and withdrawals in laws and regulations
Bitcoin is money and therefore directly competes with central banks and governments that all have their form of money. The fear of many was that governments would crack down on a decentralized digital currency that no one has ultimate control over. The rise of Bitcoin could mean that governments lose their monopoly on the money press. However, there has been no ban on Bitcoin, which is not in the air. More often, you hear that some people within the government see the benefits of Bitcoin and are pro-bitcoin. It may be that Bitcoin is opposed in some places, but in the long term, the decentralized currency always finds its way.
It is interesting to see that so-called ‘bitcoin banks’ are emerging. Companies that are officially allowed to call themselves a bank manage Bitcoin for their customers. It is only a small step towards issuing Bitcoin bank cards with which you can pay anywhere. You can then keep part of your Bitcoin in-house and store a small amount at the bank for daily payments. Most of your assets are safely managed in-house and a small part at the bank for ease of cost.
The integration of Bitcoin into the financial system and the industry that is currently forming around digital currency indicates that Bitcoin will never disappear.
Business and Bitcoin
Tech companies were among the first. For example, at Microsoft, opening XBOX games with Bitcoin was already possible in 2014. AT&T and crypto turned out to be a less fortunate combination. The world’s largest telecom provider, including cryptocurrency, was indicted in 2019 for theft over $1.8 million.
More and more exchanges have been added over the years. BitPay (USA) and Bitstamp (Luxembourg) were the first in 2011. Bitstamp is still among the most popular exchanges, along with Bitfinex, Binance and Bitvavo.
Cryptocurrency, especially Bitcoin and ethereum, is also increasingly important in online gaming. Paying with Bitcoin in casinos is becoming more and more common. For players, this means more privacy and, for operators, lower costs and more security.
Bitcoin and the euro are not comparable.
A large part of humanity has heard of the Bitcoin brand by now. They all know that it is a digital form of money, but that is usually the end of it. This fact makes it interesting in our eyes at the moment to delve into it and possibly invest. After all, as long as many people do not understand Bitcoin, you can earn money with it. Information advantage is worth its weight in gold in the financial world.
What are the most important properties of Bitcoin?
No one can print bitcoin
.This is the most important feature of Bitcoin. The protocol stipulates that only 21 million will be in circulation, and no one can change that. Compare that with, for example, the euro, of which billions are currently being printed to stimulate the economy. Every euro published further reduces the purchasing power of all other euros. Bitcoin is fine.
Securely manage your assets
The cool thing about Bitcoin is that you can have them completely under your management. You don’t need a bank to access Bitcoin. All you need is a wallet; as long as you keep it safe, no one can access your Bitcoin. For example, you are no longer vulnerable if your bank is in danger of falling over. With Bitcoin, you are in charge of your capital, and in fact, you are your bank. That’s where the statement by your bank comes from.
Bitcoin works anywhere, anytime.
The decentralized nature of Bitcoin means that the network is never down. Anyone can run Bitcoin’s software and become part of that network. Now tens of thousands of people run a so-called Bitcoin node. You can therefore see Bitcoin as a monster with ten thousand heads that cannot be killed. You can chop off one head, but there are generally three in return. This powerful network, which you can also become a part of, is always online and available. Compare that with our current banking system.
Fast international payments
If you’ve ever sent money to family abroad, you’ll know international transactions are hugely expensive. Even if you want to send the paltry amount of € 50, you will lose € 5 in transaction costs. Often it takes a few days before it arrives. With Bitcoin, that hassle is a thing of the past. For a few cents, you can send your Bitcoin to anywhere in the world within ten minutes.
Bitcoin is yet to be a means of payment.
It is important to realize that Bitcoin was not initially designed to pay for your groceries or coffee. Its decentralized nature gives Bitcoin many advantages over the euro. For example, bitcoin cannot be printed, and no one can stop your transactions. But there are also disadvantages. That decentralized nature makes Bitcoin relatively slow compared to our old familiar euro regarding daily payments. Bitcoin is currently a good savings tool for most Dutch people. Because bitcoin cannot be printed, it is better to save in bitcoin than in the euro that comes out of the printers of the European Central Bank in the billions.
You can best think of Bitcoin as the tank where you can safely store your assets, but of course, you will do your shopping with something other than a tank. You use a small, unreliable, fast shopping cart for that, namely the euro. Developments such as the Lightning Network and the rise of Bitcoin banks can also make Bitcoin usable for daily payments, but we have yet to arrive.
It’s going to be interesting years for Bitcoin.
Well, this was your introduction to the fascinating topic of Bitcoin. We hope you learned something from reading this page. As mentioned, the world of Bitcoin is huge, and many areas exist to explore. The first steps are often the most difficult and we are here to guide you. As soon as you get familiar with it, you will see that you can continue to learn new things about Bitcoin every day. That’s what makes it such a cool subject. And if the developments of recent years are a reflection of what lies ahead, then fantastic things await us. Welcome to the wonderful world of Bitcoin!
Now that you are well-read and your enthusiasm may have been sparked, you are probably looking for where to buy Bitcoin. In the chart below, you can easily buy your Bitcoin. To do so, click on ‘Buy Bitcoin’ below the chart. Are you viewing this page on a computer or laptop? Then you can pre-enter how much bitcoin you want to buy or how many euros you want to buy bitcoin for before you click on ‘Buy Bitcoin’.
What should I look for when buying Bitcoin or other cryptocurrencies? Then make sure you read more about buying Bitcoin so that you can work as safely as possible.
Know what to look for when buying Bitcoin, but do you still want to compare providers with each other where you can buy Bitcoin? Then the comparator below may offer a solution. Are you curious how bitcoin providers, brokers and cryptocurrency exchanges can differ? Then it is advisable to read more about comparing Bitcoin.