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There are thousands of cryptocurrencies in the world. Among them is ethereum, cardano or the controversial dogecoin. But the biggest of all is bitcoin.

Its defenders assure that it is the "digital gold" that will put an end to the supremacy of the dollar and that it will change the entire world financial system. Instead, his critics talk about a bubble that is going to burst at any moment because he has no backing and
it has become a den of speculators and criminals. It's like those things you hate or love.

And since there are billions and billions of dollars at stake, the battle is to the death.

In this story I am going to explain the most essential things about bitcoin by answering these four questions:

1- What is it?
2- How does it work?
3- What are its advantages?
4- What are your risks?

Bitcoin is a type of cryptocurrency, that is, a digital currency that is used as a medium of exchange to buy and sell products or as an investment. It does not exist physically, it is not issued by any central bank, it is not controlled by any country, nor is it controlled by any company. That is why it is said that it is an independent and decentralized currency. It was created in 2009 by an anonymous programmer -or a group of programmers- under the pseudonym Satoshi Nakamoto, who has become a legend among cryptocurrency advocates. At that time the system was programmed to generate a limited amount of 21 million bitcoin and it is estimated that the last of them will be mined in the year 2140.

The idea behind the creation of bitcoin -in the midst of the 2008 financial crisis- was to find an alternative to a financial market dependent on banks. Since 1 bitcoin is currently worth tens of thousands of dollars, many people buy
bitcoin bits, known as satoshis or sats. And they do it through the so-called “exchanges” or digital exchange platforms, which they access from a simple mobile application.
This is how a person in Mexico can send money to another in Japan -from one cell phone to another- in a matter of seconds and without having to use a bank. That is, the intermediary is eliminated. The bitcoin works through the chain of blocks or blockchain. In very simple terms, it is a database in which all transactions are recorded and secured. The blockchain operates through a decentralized network of powerful computers with nodes spread across the globe.

These nodes are linked and secured using cryptography. But, How is a Bitcoin created? Computers that are connected to the network work day and night to find a valid answer to a complex mathematical problem. When they solve the puzzle, they are rewarded with bitcoin.

This process is called mining and those who engage in this activity are called miners. That is why you have probably heard the expression “mine bitcoin” instead of create bitcoin. Recently, this process has been criticized for its impact on the environment, since the computers used to generate bitcoins consume a lot of electrical energy. Like all cryptocurrencies, bitcoin is used to make fast payments without an intermediary. In this sense, it is useful for those who send
money from one country to another. Another advantage is that -so far- it has proven to be a good deal for long-term investors. And, at the same time, it is gaining rapid acceptance among companies that manage million-dollar funds, such as
large investment banks. From another point of view, some bitcoin advocates believe that this currency will allow for greater social justice in the poorest countries, especially those where the local currency is devalued and money is controlled by corrupt governments.

In the short term, the price of bitcoin goes up and down like a roller coaster. It is so volatile that authorities in the United States and several European countries have warned that people could be left broke. Another thing to keep in mind is that operations are not reversible.
In other words, just as no one controls what you do, no one is going to defend you either.

CONCLUSION

And if the company that stores your bitcoins ends its operations or, for example, suffers a computer attack, you cannot rule out that your investment will disappear like smoke.
Basically, there are no guarantees. Therefore, experts say, whoever invests in bitcoin has to be willing to lose their money in case things go wrong.

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