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  • Writer's pictureJWMS Newspaper Club

What Is Bitcoin and Why Are People Spending Millions On It by Ari F.

Bitcoin is growing rapidly around the world, billionaires are buying it, selling it, mining it, and many people are wondering why. Bitcoin is a cryptocurrency, a digital coin that can be used to buy something or stored in a digital wallet. Cryptocurrencies are impossible to duplicate or counterfeit. They are stored on thousands of computers, using blockchain technology. The purpose of Bitcoin was just to create a safe and reliable way to make a payment, without a bank, credit card company, or government agencies getting in the way, but it has grown into an online empire.

The biggest advantage of Bitcoin is how secure they are. With paper money, once you use it to pay for something, it's gone. The other person owns it now. With a digital coin, it can be more easily manipulated or copied and be used multiple times. Bitcoin has an online ledger that protects the integrity of the coin. A ledger is a record of every transaction that uses Bitcoin and anyone can see it. The ledger uses blockchain, which makes it very hard to hack. Blockchain spreads information across thousands of computers. Each computer has a certain piece, or block of the information.

Another key part of Bitcoin is bitcoin mining. Bitcoin mining is the process of creating new Bitcoin by solving complex math equations. There is a limit of Bitcoin, only 21 million can be mined, so people run many computers at a time to try to be the first to solve the problem and receive Bitcoin. Bitcoin mining has another purpose. Bitcoin miners also help complete transactions of Bitcoin and prevent fraudulent ones. In return, they receive a small piece of Bitcoin after they have completed one block (1 mebibyte) of transactions.

As more people are jumping on the Bitcoin train, the price of Bitcoin is rising. Currently, one Bitcoin is worth almost $55,000 dollars. Recently, after the online explosion of GameStop and Dogecoin, a different type of cryptocurrency, Bitcoin has caught the attention of huge companies. In February, Tesla purchased $1.5 billion in Bitcoin. This increased the price of Bitcoin by 20% but also drove down Tesla Stock. On March 24, Tesla announced you can purchase a Tesla car with Bitcoin. This was a surprising purchase for a lot of people, but there is a good reason behind it. With a limited amount of Bitcoin, and more people starting to mine, getting a hand on thousands of them could be a great investment for the future.

Bitcoin is growing in popularity and price as more people learn about it and buy it. Just a couple of decades ago the world shifted from paper to computer. From big clunky computers and wired phones to mobile phones and small portable laptops. You never know, the world might change from paper money to cryptocurrency soon too.

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