What is Bitcoin?

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Bitcoin (BTC/XBT) is a form of digital currency invented by Satoshi Nakamoto that runs on a decentralized peer-to-peer network payment system. It gives a Bitcoin owner flexibility to send and receive payments without the involvement of a financial institute such as bank.

Famous acronym for this coin is BTC but due to ISO 4217 standard, its name was clashing with some other currencies (Bhutanese Ngultrum (BTN)) therefore there's need to set a new abbreviation for Bitcoin and that is XBT. Don't get confused both BTC and XBT are same.

Bitcoin supply is limited to 21 million, no more bitcoins can be mined. The smallest unit of BTC is called Satoshi, named after its creator. One Bitcoin is equal to 100,000,000 Satoshis or 0.00000001 BTC. Those who can't buy 1 XBT coin can buy Satoshis.

You know what is the best part of this? No one owns Bitcoin network, it's the people who run and use it. Network is fully open source and decentralized.

Instead of a third party payment partner, thousands of independent computers across the globe connected to the Bitcoin payment system, called Blockchain, verify Bitcoin transactions and make this system secure. In returns, these miners (people who deploy their computers to make BTC transactions successful) earn small incentives in the form of Bitcoin.

Bitcoin transactions are cheaper and more quick in nature than traditional digital payment methods. For example if you would send a payment to oversea using your bank than first your bank will charge a Forex transaction fee then it'll facilitate your transaction and will convert your country's currency into recipient's country currency.

This entire process usually takes 3-7 days.

On the other hand, if you'll send the same payment using BTC then first you'll not pay any Forex transaction charges, you will only pay a nominal network fee (even you can decide your fee) and within 30 minutes (may vary) your payee will receive the amount.

Here one important thing that you must know is cryptocurrencies are highly volatile for example within minutes BTC price could plunge so drastically.

Let's understand it with an example assume you sent 0.005 BTC who are equal to $100 to someone and current market trend triggers panic selling and within minutes BTC price drops by 30 percent, now your payee will still receive 0.005 BTC but their value in USD dollar will be $70 (due to 30% drop).