Bitcoin is the foremost Crypto currency in the world and can be used as a virtual means of payment, an investment, or digital gold. There is no central banking authority that regulates the currency, and it is perfect for peer-to-peer payments.
· It is based on blockchain
The originator of Bitcoin, Satoshi Nakamoto, based the bitcoin on the blockchain. This is the number one rule that defines the currency. It is thus essential that you understand and know what blockchain is and how it works to support and underpin Bitcoin. Blockchain essentially allows for all the real-time information shared on a network to be available for all at the same time. Any transaction related to the mining, selling, storage, and purchase of bitcoins is recorded and added to the blockchain of information.
· Only so many bitcoins will ever be made. There is a finite supply
There is a hard cap of 21 million bitcoins that will ever be made. This hard cap or limit is what has been noted as the main determinant of value for the bitcoin. There is no apparent reason as to why the hard cap number was 21 million, and the number itself has no significance to denote that there will be an end in supply.
The currency is also infinitely divisible, which means as long as there is a value, you are able to split coins into ever-smaller amounts and values. This has increased the number of uses for Bitcoin dramatically, and from online gambling at places like mBitcasino to buying pizza is being used for more and more as the value increases and the ability to split and use the cons in more places than ever before.
· Mining bitcoin
Mining bitcoin has become ever more difficult over time since the inception of the cryptocurrency. Solving the hash, which is what will earn you the bitcoin, is now extremely complex and could reach trillions of attempts on average. This has seen the mining of bitcoin become ever more complex and intensive and, as a rule, more costly.
· Halving
This is an important concept in the mining and development of bitcoin. The value of the mining reward for solving the has is halved every four years or so, and as such, what started as 50 BTC is now valued at 6.25 BTC for the solution as a bitcoin is created/mined.
· There are no rules
The last and yet most important rule is that there are no rules to govern Bitcoin or any other cryptocurrencies for that matter. On the surface, there is no central banking regulations and no set structure for the mining and generation of Bitcoins. This is possibly one of the reasons that it is the most volatile currency of all time. Those who own bitcoin have it all to gain should the prices keep rising, and they arguably do just this.
Bitcoin is an unregulated cryptocurrency that exists on the world wide web and nowhere else. As this currency becomes more mainstream, there may be more rules and regulations that go with it. However, at the current time, there are very few fixed rules related to bitcoin. Those mentioned in this article are the foundational guidelines and will form the basis of any Bitcoin rules to come.