Bitcoin refers to two different, but related parts of a whole. One the one hand, Bitcoin (BTC) is a digital coin that can be bought, stored, divided and sold. Bitcoin also refers to the blockchain system which records all BTC transactions and releases new BTC to the market when certain conditions are met.

As a currency, BTC has value, primarily because it is desirable - its price is determined by the logic of supply and demand. Just as with gold, there is only a limited amount of BTC available. This is different from the US dollars and other fiat currencies which can be printed on demand. There can only ever be 21 million BTC in circulation and they are gradually released into the market.

BTC can be divided into one hundred million units, called ‘satoshis’, which equals 0.00000001 BTC. Because of how the Bitcoin blockchain works, transactions are cheap, fast compared to regular bank transfers, relatively anonymous, and the global record of transactions cannot be manipulated.

When BTC was first issued, in 2009, it had zero value and was merely exchanged for hobby purposes. In July 2010, BTC’s value grew tenfold from $0.008 to $0.08 per BTC. In 2011, the price rose from $1 to $31 and then back to $2. In the year 2017, the price of BTC rose by 1,824% reaching a staggering $19,783. In 2019, a price rally took it from $3,400 to $13,200, and in January 2020 it rose slightly above $9,000.

BTC is not the only cryptocurrency. There are others such as Ethereum (ETH), Litecoin (LTC), XRP (XRP), EOS (EOS) and many more that run on their own blockchain programs, and have their own unique identity in terms of their use case, popularity and price.

If you believe that any of these cryptocurrencies is likely to rise in value over time, you can simply buy them, hold them in a digital wallet and sell them at a later date. You can also try and benefit from price movements across currencies and trade in and out of these coins actively.

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