Are you struggling with buying or selling Bitcoin?
Do you wish you could understand how Bitcoin works?
Then this beginner’s guide to bitcoin is made just for you.
Bitcoin is the fastest growing digital currency in the world today and many have joined this train, wondering what to know about Bitcoin before joining the bandwagon? Then this article is for you.
Bitcoin emerged in 2009 and is recognized as the first established cryptocurrency and the main objective is to make the seller be in charge, do away with the middleman, remove interest fees and make transactions transparent in order to boycott corruption and cut fees.
A decentralized, new electronic cash system, where you have the control of your funds and be in the know-how of the proceedings was created.
It was developed by the anonymous Satoshi Nakamoto (whether it is an individual or a group, the real identity is still not known). In 2011, Nakamoto revealed the source code and domains with the Bitcoin community but hasn’t been heard from.
Bitcoin is a currency accepted far and wide by many companies including a large Jewelry chain in the US by the name REEDS JEWELERS.
This doesn’t leave out billion-dollar businesses like Dell, PayPal, and Microsoft. It has its application programming interface, price index, forums discussing cryptocurrency, a website that promotes it, an exclusive magazine and its own exchange rate. Bitcoin isn’t governed by the government body, financial institution or any other authority, the owners are anonymous, i.e. no account numbers, no names, no social security numbers or any other form of identification that has the potential of connecting Bitcoin to its owners.
Bitcoin is a form of cryptocurrency which in itself is an exchange of digital information that allows you to buy or sell goods and services, it is also referred to as virtual currency, transactions can be made by wiring, check or cash, in using Bitcoin, you get to refer your purchaser to your signature which really is a long line of encrypted 16 distinct symbols as the security code. It is regarded as the best-known version of digital currency in use today.
Ever heard of Mining of Bitcoins? It is a process whereby the blockchain technology and encryption keys are used to connect buyers to sellers, the technical, complex computers generate smaller parts with the smallest fraction being one hundred millionths of a Bitcoin, referred to as a “Satoshi”, named after the founder Nakamoto.
This process involves computers solving an extremely complex mathematical problem that gets difficult with every step, once a challenge gets solved, one block of the Bitcoin is released to the miner. A Bitcoin address is provided by the user in order to receive the mined Bitcoins.
Every Bitcoin owner has a Bitcoin wallet which is easy to operate just like PayPal, it’s simply for storing and keeping tab of your digital money and where you can spend the Bitcoin.
The wallet is free and available and is provided by Coinbase. Once you earn Bitcoins, there are ways to lead out and earn interest, this can also be achieved through trading; your regular currency can be traded for Bitcoins at Bitcoin Exchanges, the largest one being Japan-based Mt. Gox which handles 70% of all Bitcoin transactions.
A recent form of trading called Bitcoin Features was launched recently as a legitimate asset class, more than 100,000 merchants accept Bitcoin as a form of payment for everything ranging from gift cards to food items.
As there is nothing in life without risk, Bitcoin also comes with its risks, due to its anonymity and lack of regulation, it is susceptible to hacking by cybercriminals and difficulty may arise if any issue comes up due to the fact that there is no governing body, Bitcoins can get stolen or lost and considering the fact that it is relatively new, there abides a lot of unknowns and its value is very volatile and susceptible to radical change and once it hits the blockchain, it is deemed final. In 2014 Mt.
Gox went offline and 850,000 Bitcoins were never recovered, but then, the benefits outweigh the risks.
It is highly recommended that a new investor should make sure they have a strong grasp of the Blockchain which in itself is the distributed ledger system that underlies all digital currencies, “Find a trusted person or resource that you can engage with to ask questions in order to understand the nuances of your investment in a safe environment.” Chipped in Adam Nestler, CEO of Kudos, a decentralized protocol for building a fair service economy.
Also, such investors are advised not to be hasty or impatient about investing but should proceed with caution, Marshall Swatt, a serial entrepreneur has this to say to that effect, “start small and invest a small portion of your capital.”
The main thing to understand is that there is the potential of losing investments so be willing to lose everything but yet there is a greater potential for gaining very much on your investment.