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What is a Bitcoin?

Bitcoin is a decentralised digital currency that has gained popularity in recent years. It was created in 2009 by an unknown person or group of people under the pseudonym Satoshi Nakamoto. Bitcoin works through a peer-to-peer network and transactions are recorded in a public register, the blockchain.

cointract crypto trading app news: Was ist Bitcoin?
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Main features of the Bitcoin

One of the main characteristics of Bitcoin is its decentralised nature. Unlike traditional currencies, Bitcoin is not controlled by a central authority such as a government or financial institution. Instead, it operates through a network of computers that are interconnected. This decentralisation ensures that no single entity can manipulate or control the Bitcoin network and is therefore suitable as the basis for the future payment system.


Another characteristic of Bitcoin is its limited supply. Only 21 million Bitcoins can be generated. By 2021, over 18 million Bitcoins have already been mined. This scarcity is one of the reasons why Bitcoin is often compared to gold, as both assets are limited in supply and are seen as stores of value.


Another advantage is its dividability. The smallest unit of a Bitcoin is a Satoshi ("Sat"). One sat corresponds to one hundred millionth (0.00000001) of a Bitcoin. This means that each Bitcoin consists of 100 million sat.


At the end of 2021, global assets amounted to USD 463,600 billion. If in 10 years 5% of these assets - which corresponds to a normal liquidity holding of a company or household - are held in Bitcoin, this corresponds to a value of USD 23,180 billion or USD 1,103,810 per Bitcoin. One Sat would then have a value of 1 cent.


Bitcoin transactions are also known for their fast processing and low fees compared to traditional financial systems. Transactions on the Bitcoin network can be completed within minutes. The fees for these transactions are also much lower than those charged by banks and other financial institutions today.


The value of bitcoin is determined by supply and demand. That is why its value still fluctuates strongly within short periods of time. Nevertheless, the fluctuations have steadily decreased over the last 10 years and will continue to decrease with increasing demand and regulation.

Cointract-Crypto-Trading-Was-ist-Bitcoin-Grafik-Volatilität-Bitcoin
Source: buybitcoinworldwide.com/volatility-index/

Bitcoin's current volatility, measured by the closing prices of the last 30 days, is 0.65 % (as of 16.08.2023). In April 2023, for example, it was at 2.33 %. If you want to check the current volatility index, you can view it here.


Despite these challenges, Bitcoin continues to gain mainstream acceptance. In Switzerland, 85,000 retailers can now quickly and easily offer their customers payments in cryptocurrencies, including well-known companies such as Microsoft, Spotify and SBB. The city of Zug has been accepting Bitcoin as a means of payment for all services since 2016, e.g. also for the tax bill. Big companies like PayPal and Tesla have started to accept Bitcoin as a means of payment, and many countries are looking into the possibility of creating their own digital currencies. In Switzerland, the law now allows companies to be set up with Bitcoin.


Bitcoin has become the most important decentralised digital currency with a capitalisation of € 520 billion (as of 16.08.2023) and a daily trading volume of € 12 billion, and its popularity continues to rise.


This article is for informational / promotional purposes.


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