Finances & Money

Understanding Cryptocurrencies and How They Work

Any cryptocurrency is digital currency where encryption methods are applied for the regulation of the generation of units of currency. Encryption methods are also used for the verification of funds transfer and the currency functions globally and independently without regulation from a central bank. Virtual currencies and more significantly the Bitcoin have become very popular today and although not many people understand them, banks, governments and the business world have become cognizant of the importance of this type of currency.

The Beginning of the Bitcoin Currency

Bitcoin was invented by Satoshi Nakamoto, a man that not many people know today. He invented the cryptocurrency as an open source software that went on to function as an electronic cash system that was decentralized. Bitcoin as a currency was designed to work as a means of exchange that functions with the backing of cryptography that ensure that financial transactions are totally safe.

Understanding the XBT Cryptocurrency

The financial market has currency symbols that are unique. This is a feature that is found in every financial market because of an organization that ensures this is so. The organization is known as the International Standards Organization (ISO). The organization has determined the currency symbol for every country. Because there are assets that are not dependant on a specific nation, these assets have an X at the beginning of their prefix. These assets include gold, copper, and lately the Bitcoin, which is not connected to any country.

The Origins of the XBT Symbol

The initial acronym that was given to the Bitcoin cryptocurrency when it became popular in 2008 was BC. On the exchanges, most people began to use BTC and it was generally accepted as the ISO code of currency. BTC was however not in conformity with the International Standard Organization (ISO)’s code list. This did not mean much to people who were using the Bitcoin cryptocurrency and they did not see it as an issue. They did not regard this as important because they never intended to conform to the regulations. Bitcoin was after all designed to move away from the centralized financial system that was in place.

So exactly what is XBT? The acronym came into the picture in 2013 when there was information that Bloomberg terminal had started using Bitcoin in its ticker although as XBT. This was in conformity to ISO 4217 because the first letter in any currency are a designation of the country. Since Bitcoin has no connection to any nation, in the same manner that gold (XAU) is not, it was given an X. Anytime the XBT symbol is displayed as contrasted to BTC, it is actually Bitcoin. Bitcoin also abbreviated as XBT is stateless and does not belong to any specific nation. This is why it is a decentralized currency that cannot be controlled by any regulatory authority. XBT is now seemingly more acceptable to the business world because it conforms to international standards. BTC is the acronym that the Bitcoin community uses, while XBT is the abbreviation that the traditional setup of the financial world prefers to use.

 

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Susan Paige

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