Bitcoin is the most well-known cryptocurrency in the crypto space, its origins dating back to 2009. Essentially, Bitcoins are lines of computer code that are digitally signed each time they pass from one owner to the next. They are stored in a digital wallet, either online through an exchange like Coinbase, or offline on a hard drive using specialised software. For every transaction, the sender and recipients’ Bitcoin addresses and the amount transferred are inscribed into a ‘ledger’, which cannot be amended or deleted. Bitcoin has lower transaction fees than traditional payment methods and can be traded in the open market much the same way as FIAT currencies such as the USD. Unlike FIAT, however, it is not controlled by any central government.
Cryptocurrencies such as Bitcoin are high-risk, speculative investments. However, with the recent decline in the US dollar and the growing uptake of Bitcoin for everyday transactions, trading in Bitcoin has become widespread. Although there are numerous other cryptocurrencies now available - names such as Ethereum, Rune, Doge and XRP, to name a small handful - Bitcoin remains the giant on the crypto stage. One of the most appealing aspects of Bitcoin and its cryptocurrency cousins is that its value cannot be set by any central bank’s decisions. And now that major investment banks like Goldman Sachs and payment providers like Paypal and Square are participating in this crypto space, there is a growing consensus in the financial world that Bitcoin is here to stay.