Bitcoin is the world’s first decentralized digital cryptocurrency that appeared in 2009. BTC coins are produced with the help of mining. Transactions in the BTC network are based on the peer-to-peer principle, which means a direct transfer of funds from one user to another without the participation of third parties and controlling bodies like banks, regulators, etc. A lot of people use Sapien Bitcoin wallet for the “digital gold”.
The total number of Bitcoins is strictly limited to 21,000,000, with 18,588,968 BTCs already mined as of 2021. It is more than 85% of all coins. The amount of BTC coins in circulation is even less, as this figure does not take into account lost Bitcoin hardware wallets. Bitcoin is a worldwide payment system without inflation. Its main difference from traditional payment systems is that the Bitcoin network does not have any managing or processing center – all transactions take place exclusively in the peer-to-peer network without intermediaries. Thanks to decentralization no one can undo/deny a transaction or take away/freeze your Bitcoins.
What is Bitcoin for and how can it be used?
The question “What is Bitcoin” can be answered in simple words – it is money that has its own exchange rate in relation to another currency, but has no physical form. Unlike state currencies, cryptocurrency cannot be printed. However, this does not mean that virtual coins appear out of nowhere.
Bitcoin is a digital object that contains a huge amount of information. It is a kind of virtual memory card that has a digital record. To generate a new record, it is necessary to find a single correct solution to a very complex mathematical algorithm. Since even the smartest human can’t handle such a task, the computing power of a computer is used for this purpose. Bitcoin can be used:
- As alternative means of payment. There are more and more businesses that accept Bitcoin as means of payment. Some companies are accepting exclusively BTC. Since Bitcoin uses a P2P system, such businesses don’t have to fear blocking their accounts, and their users will be anonymous. In general, Bitcoin has become quite popular. It is accepted by more than 100,000 merchants online and offline, and the number is growing every day.
- As an alternative to a debit card. Bitcoin provides opportunities similar to banking services. In some regions, people already have access to Bitcoin ATMs where they can withdraw or top up their wallets. Such cards can become an alternative to debit bank cards.
- As a permanent record of transactions. Blockchain captures all transactions of this cryptocurrency. More importantly, since third-party data can be entered into the records, the Bitcoin network can be used to exchange information and values unrelated to itself. This mechanism is much better implemented by altcoins like Ethereum (ETH), but it was Bitcoin that first proposed this concept.
- Replacement of fiat currency. Bitcoin is a ready-made solution for those who do not want or cannot use fiat currency, who have lost faith in central banks, who live in a country with a deteriorating economy, or a region without a sustainable currency. If to omit the super-volatility of the exchange rate, for now, Bitcoin is a good investment tool and a healthy alternative to fiat currency.
Where to store Bitcoin (BTC) tokens?
The question of how to create a BTC wallet is very popular. If you are considering BTC as a long-term asset, it is better to store coins in a non-custodial Sapien Bitcoin wallet. You can exchange Bitcoin directly in our non-custodial Bitcoin Sapien wallet. The main advantages of a non-custodial Bitcoin Sapien wallet are:
- Multi-currency crypto wallet
- User-friendly interface
- Built-in rating system
- Possibility of in-app correspondence
- Low cryptocurrency exchange fees
- Ability to buy and withdraw cryptocurrencies using Visa and Mastercard
- Fully decentralized cryptocurrency wallet
Sapien Bitcoin Wallet is a fast and secure multi-crypto wallet with a rating system, designed for easy use of cryptocurrencies. You can buy BTC, ETH, LTC, XRP, XLM, BNB, BCH by paying with Visa and Mastercard in the app. Our wallet is ideal for storing crypto assets.
The distinctive features of BTC as a cryptocurrency
Because many people evaluate this cryptocurrency as an investment tool, they look for a reliable Bitcoin hardware wallet. But they are wrong because they can use Sapien wallet Bitcoin that provides the highest level of security. The distinctive features of BTC:
- No control. Complete lack of control over the system by anyone. Millions of computers that mine Bitcoins are part of the system. No one has the ability to dictate their terms to cryptocurrency owners.
- It is easy to use. It takes about 5 minutes to create a Bitcoin Sapien wallet that is ready for immediate use. You won’t be asked anything, you don’t have to pay a penny.
- Anonymity and transparency. Bitcoin wallet is absolutely anonymous and completely transparent at the same time. It is very easy to create a lot of Bitcoin wallets without giving your name, phone number, etc. But the Bitcoin network stores all transaction history. If you publicly advertise that this wallet is yours, then anyone can know all your transactions and the amount of BTCs in your account.
- It is impossible to return transactions. Once Bitcoins are sent to the addressee, it is impossible to return them, unless the recipient himself wants to do it.
- Open-source code. Bitcoin has open-source code. This means that most users can make changes to Bitcoin’s structure. In addition, open-source allows any person to start BTC mining. This approach to development instantly eliminates bugs in the system, helps rapidly develop the exchange network, and mine Bitcoin.
- Transaction protection with electronic signatures. The electronic signature is a password assigned to a new account. When registering in the Bitcoin network, all users are given unique signing keys. Only with their help, it is possible to make a transaction from your account.
- Bitcoin halving. Halving is the process of dividing the number of rewards for the mined blocks. Bitcoin halving is scheduled by block number, not by date. The halving occurs every 210,000 blocks and reduces the reward by 50% each time exponentially.
Differences of Bitcoin from classic fiat money (dollars and euros)
A decentralized currency that no bank or exchanger controls has always been a nightmare of the global financial system. Bitcoin is scattered around the globe, operates only online and every user in the world can influence the exchange rate without leaving his or her computer. Electronic cryptocurrency has several striking differences from the usual cash and other valuable financial assets. Bitcoin has the following differences:
- Decentralization. There is no central authority controlling the network. A decentralized system uses special software code that regulates the network participants and the issuance schedule.
- Transaction irreversibility. After the cryptocurrency is transferred from one recipient to another, it cannot be returned to the original BTC wallet.
- Limited supply. Mathematical algorithms are built so that the generation of coins is limited. The total amount of BTC will never change.
- Low transfer fee. The peculiarity of Bitcoin is the absence of any intermediaries during the transaction, due to which there is no great commission fee.
- No inflation. Global inflation is isolated from the financial economy of BTC, so inflation does not affect the exchange rate, unlike regular currencies.
Principles of Bitcoin and BlockChain technology
- Blockchain is a database that does not have the main server. Encrypted copies of this database are stored by all participants of the system. The database represents all transactions made with BTC (mining, transfer, purchase, sale). Absolutely everything is recorded in the database and is available to all participants of the system.
- Any new entry in such a database is synchronized with all of its copies in all who participate in this system. If someone tries to steal something, he or she will have to replace the data in more than half of the system participants. Since the network has more than a million participants, it is impossible.
- Each new block in the database contains information (hash) about the previous block, and so on, block by block. This information confirms that the block is intact, not altered or faked.
- The issuance of BTCs is limited, the maximum number is 21 million. This principle protects the cryptocurrency from inflation. BTC can be compared to gold as both gold and Bitcoins can only be bought or mined. Bitcoin mining is a complex calculation process. Mining is performed on special ASIC farms.
- Whoever decrypts the transaction block is rewarded with BTC tokens. Computers that participate in cryptocurrency mining provide the ability to make transactions in the system as well as pass this information to all participants in the system, by adding and synchronizing it between databases. All users of the system have a specific address (crypto account) and a secret key, which is used to sign transfers from their account to the account of another user of the system.