What is Bitcoin?

Bitcoin is a form of digital currency or cryptocurrency that was created in 2009 by an anonymous person or group known as Satoshi Nakamoto. The name "Bitcoin" refers both to the digital currency itself and the distributed network that manages and secures transactions in this currency.

What is cryptocurrency?

Cryptocurrency is a digital currency based on blockchain technology. It is a decentralized currency, meaning it is not regulated by a central bank or government.

How does Bitcoin work?

Bitcoin operates using a technology called blockchain, which can be seen as a decentralized "digital ledger". This ledger records all Bitcoin transactions in sequence, and everyone in the network has the ability to see it. Each block contains a list of transactions, and each new block added to the chain contains information that builds on the previous blocks, giving the blockchain its immutability and security.

What does decentralized mean?

Decentralized means that it is not controlled by a central authority or other central entity. The fact that the blockchain is decentralized means that it is distributed over a network of computers, which we call "nodes". The nodes cooperate to validate and verify transactions, and none of the nodes have more power than others.

Bitcoins are created through a process called "mining". This involves computers solving complex mathematical problems. When a problem is solved, a new block is added to the blockchain, and the "miner" is rewarded with a certain number of new Bitcoins. This process also helps to secure the network by verifying the transactions in each new block.

How do you use Bitcoin?

To use Bitcoin, you need a digital wallet. This wallet can be a software installed on your computer or smartphone, or it can be a physical device designed specifically to store Bitcoin.

To send Bitcoin to others, you need the recipient's Bitcoin address. You enter this address in your wallet, along with how much Bitcoin you want to send. Then you confirm the transaction, and it will be sent out to the Bitcoin network, where it will be confirmed and added to the blockchain by the aforementioned "miners".

Why is Bitcoin so popular?

Cryptocurrency like Bitcoin has become popular for several reasons. Firstly, it provides an opportunity for decentralized and anonymous economic activity. Transactions with cryptocurrency can be carried out without the involvement of third parties such as banks or governments. This has appealed to many who want to preserve their privacy and have more control over their money.

On the other hand, cryptocurrency has been considered an investment opportunity. Some people have earned large sums by buying cryptocurrency at low prices, then selling them when the prices have increased. However, this volatility has also led to significant losses for other investors. It's important to note that cryptocurrency is highly volatile and can be risky to invest in.

Uses for Bitcoin

Bitcoin, as the first and most well-known cryptocurrency, has a number of applications in the digital world. Some of the most prominent uses include:

1. Digital currency: The primary use of Bitcoin is as a form of digital currency. This means that it can be used to purchase goods and services online, as long as the seller accepts Bitcoin as a method of payment.

2. International transfers: Bitcoin can also be useful for sending money across national borders. Traditional methods of sending money internationally can be both expensive and time-consuming, whereas a Bitcoin transaction can be carried out almost instantly with minimal fees.

3. Investment object:: Bitcoin is often regarded as an investment, similar to stocks or bonds. The value of Bitcoin has had significant fluctuations in value since it was created, and some investors have achieved large profits - while others have suffered big losses.

4. Microtransactions: With the introduction of technologies like the Bitcoin Lightning Network, microtransactions – very small payments – are possible. Traditional payment systems often have limitations due to fees or minimum transaction amounts, which can make processing very small payments inefficient or unprofitable.

What is the Lightning Network?

The Lightning Network solves this problem by allowing users to open payment channels between each other. Within these channels, users can send an unlimited number of payments, all of which can be very small, and only pay Bitcoin network fees when the channel is opened or closed. This makes it possible to efficiently handle microtransactions with Bitcoin, which opens up completely new types of digital services.

How to invest in Bitcoin?

Buying Bitcoin can be done easily and safely through Kryptofi. Kryptofi is a platform that allows users to trade Bitcoin in a secure way, without having to keep the money on an exchange. Creating an account is completely free, and you retain full control over your own funds, instead of leaving them to a third party.

However, it's important to note that Kryptofi currently only offers trading in Wrapped Bitcoin (WBTC). WBTC is a version of Bitcoin that is "tied" to the Ethereum network. Being tied in this way makes it compatible with smart contracts and applications on Ethereum. This makes it possible to earn interest on your Bitcoins. A WBTC should always be worth the same as a Bitcoin, but relies on a network of centralized managers and is therefore not decentralized in the same way as Bitcoin (read more here: https://wbtc.network), but in our view, it is safer and more decentralized than Bitcoin stored on a centralized exchange where only a centralized entity has full control.

At Kryptofi, you will get full support and help along the way. The service is "non-custodial", meaning that Kryptofi does not store, control or have access to your digital assets. You have full control and ownership over your assets. This principle is one of the main pillars behind cryptocurrency and decentralized finance, aimed at giving people more control over their own finances and reducing dependence on centralized financial institutions. You can learn more about what "non-custodial" means here.

To start your investment journey with Bitcoin, you can create an account on Kryptofi. From there, you can buy WBTC and monitor the value development in your portfolio. You can even earn interest on your money by placing them in decentralized savings products.

As with all investments, it's important to remember that investing in Bitcoin and other cryptocurrencies carries risk. You should always educate yourself, and assess your own risk tolerance before making an investment.