The first-ever cryptocurrency, Bitcoin, was launched in 2009. In May 2010, a person made the first transaction in the history of bitcoin by purchasing two large pizzas for 10,000 bitcoins. If we evaluate the same purchase in today’s time, it would be more than $560 million. These 12 years of cryptocurrencies have been a rollercoaster ride because the market of cryptocurrencies is extremely volatile. In the past year, the total value of cryptocurrencies has skyrocketed to around 500%, and those who invested in bitcoin in its early days have millions in their wallet. Bitcoin’s price was not even a penny when it was launched back in 2009, but its value surged to $61,683 per coin in past months. Get the maximum advantage of bitcoin’s increasing price by trading bitcoin with crypto-revolution.app.
What are cryptocurrencies?
Cryptocurrencies are virtual money or digital currencies that are based on software. Everything in cryptocurrencies is done digitally as cryptocurrencies are the computer code. You can buy, sell, store and trade in cryptocurrencies digitally. Bitcoin is the most popular cryptocurrency, and it is in the form of digital coins or tokens. Your digital token represents the number of cryptocurrencies that you own according to its current market value. You can choose to buy or sell digital tokens based on their market value.
The unique feature of cryptocurrencies is that they are decentralized. Unlike fiat currencies that are centralized and issued and controlled by government and banks, cryptocurrencies are decentralized means independent of third parties like financial institutions or government. Bitcoin is a computer code, and its supply is fixed that cannot be changed, and the blockchain network controls its value according to its demand and supply in the market.
Which are popular cryptocurrencies?
According to any organization, it has been estimated that there are around 7800 cryptocurrencies that exist in the crypto world, and developers are working on more cryptocurrencies. Based on the market capitalization of cryptocurrencies, bitcoin tops the list with the highest market capitalization of more than $1 trillion. After bitcoin, Ethereum is the second-largest cryptocurrency, and after that, the other popular cryptocurrencies include Tether, Polkadot, Ripple, Litecoin and more.
Working of cryptocurrencies
Bitcoin and all other cryptocurrencies are based on blockchain technology. Bitcoin was the first cryptocurrency that was developed with the idea to provide people with a medium of exchange that works electronically. Bitcoin could not have existed without blockchain technology and the main contributors known as miners who do mining bitcoins. First of all, cryptocurrencies can be purchased from cryptocurrency exchanges that are specially developed marketplaces. Once you buy bitcoin or other cryptocurrencies, you must store your digital tokens as these tokens cannot be stored in physical wallets. It would be best if you had a digital wallet to store your bitcoins or digital coins.
When you plan to make a transaction, that transaction could only be made through digital wallets. All the bitcoin transactions are verified through a person-to-person network of thousands of computers that participate in the mining process of bitcoins. Miners work on powerful computers to solve complex algorithmic puzzles by ensuring the legitimacy of transactions through the proof-of-work consensus method. Once 1 MB worth of data is mined, it is gathered into blocks, and each block is grouped with its previous block. For mining bitcoins, miners are rewarded with digital tokens. The completed block is then linked to its previous block to create a long chain of blocks. Each block contains a copy of the blockchain public ledger, and the data in blocks are interlocked, making it nearly impossible to modify the data in a set of blocks.
Mining for bitcoins
Bitcoin supply is fixed as it is 21 million bitcoins, and the supply of bitcoin is created finite by its creator, Satoshi Nakamoto. Once you purchase bitcoins, it is put into the record of blockchain technology. The amount of bitcoins in circulation is completed based on the complicated mathematical puzzles that miners solve with software where the bitcoin code is stored. The first block that was created was known as the genesis block. The first block was mined with a single computer, and initially, at that time, the reward for mining bitcoins per block was 50 BTC.