What makes Bitcoin different from a traditional currency?

The first Bitcoin was mined in the year 2009 and the number of Bitcoin is growing slowly but at a declining rate. This lets you believe that when the 21st millionth Bitcoin will be mined in the year 2140 there will be no more Bitcoin created after that.Find out more about this.

There have been many versions of Bitcoin that have been created and this is known as a fork. The difficulty of these competitors is that to persuade people to follow them. And if a currency is being used by just one person then you cannot really call it a currency.

What can one do with cryptocurrencies?

At least, in theory, one can do anything done with a computer that he wants with the cryptocurrency. When you build a cryptocurrency you turn the worldwide network into a platform that is decentralized and this is used for data processing and data storage.

The uses that are available are however a little limited. Like Bitcoin can be used to make some online payments but only for a few online merchants now. The real world transactions accepting Bitcoin payment is very rare. The other cryptocurrencies are more juvenile. The popularity of the cryptocurrency today is not because what it actually does but what its potential is in the future.

How does it even matter that the cryptocurrency is decentralized?

Cryptocurrency is something like a database that is very fancy. The database of Bitcoin is very vast and it contains details of who owns which Bitcoin and what transactions were actually made between the owners of this cryptocurrency. In other words, it is just a little different from a traditional bank. The banks have details of who owns how much money and what transactions were made between the owners.

But the key difference is that there is no central authority that actually runs this database of Bitcoin. The bank can actually go ahead and edit its database to make changes to your account and the amount of money that you have. This may or may not work in your favor.

ButwithBitcoin this cannot be done. The only authority here is what the network of users decides upon. The authority thus lies on the majority of the Bitcoin users.

This thus makes Bitcoin completely decentralized and out of the hold of a traditional bank. The future of cryptocurrencies thus looks promising and this is the key reason for the huge splurge in demand for cryptocurrencies.