What Is Used to Make Bitcoins?
- Government Coding
One thing that makes Bitcoins so popular is the fact that they are not regulated by any government or single entity. that means the currency can’t be devalued by creating more of it. In fact, there will only be 21 million Bitcoins when they have all been generated. And, although they can potentially be traded for gold or silver, Bitcoins are cryptocurrency, which means they rely on mathematical solutions rather than any physical resource.
Bitcoins are made of “blocks”, which are constantly being “mined” around the world. The blocks are added to a block chain, which stores all the information about each Bitcoin transaction. Almost anyone can mine Bitcoins, provided they have access to the right equipment and the power to run the equipment. Basically, mining Bitcoins or any cryptocurrency takes a lot of processing power. However, that also means that no one person controls the currency, as no one person holds all of the blockchain.
US dollars (USD), on the other hand are backed by the GDP, which is basically all finished goods in the country plus government outlay, minus imports. To sum it up, the USD is backed by debt, when it was originally backed by gold and silver. When the government needs to replenish the supply, they print more, and we go into more debt.
Another difference is the tracking. There is no way to track an individual dollar or where it might be spent. But, your accumulative wealth CAN be tracked through bank accounts and lender accounts. Bitcoins are not tracked in anything but the blockchain, with the owner of the Bitcoin being the only one who has access to it.
To gain a better understanding, think of Bitcoin as you would a limited series of antiques. Only a set amount are made, and some may be lost, or taken out of the market. Their value is based on peer to peer exchanges and investments, rather than government spending or production.