What is Bitcoin

The Wild and Wonderful World of Bitcoin

Bitcoin is a digital cryptocurrency utilized for the immediate and secure transfer of “value” to anywhere in the globe. Uncontrolled by financial institutions or regulatory bodies, Bitcoin is an entirely open network fully managed by its users. The popularity of Bitcoin has skyrocketed since its inception as the world’s first crypto currency, and the godfather coin is showing no signs of a slowdown, with current valuation at the time of this writing at over $4,300 per coin, when it was hovering between $20 and $50 just a few short years ago.

Bitcoin allows you to immediately and anonymously complete financial transactions without the need for a bank as a middleman. You can access your money without an ATM or credit card as well. Larger online businesses and e-commerce operations have begun accepting Bitcoin, as well as nonprofits for donation purposes.

Bitcoin: What is It? How Do Bitcoins Work?

The core protocol of Bitcoin, the blockchain, is viewable by anyone and everyone. It has been researched and tested by multitudes of security personnel worldwide and has proven itself time and time again to be a robust and reliable security setup. The utilization of Bitcoin is like such applications as online banking or email access, password protected to ensure you are the sole user with the account and transactional access.

The valuation of Bitcoin is not related in any way to the value of any other physical form of currency. In a similar vein to real estate or the stock market, the value of Bitcoin (and all crypto currencies) is determined through the purchase and sale of the coin on exchanges. The price of a Bitcoin changes in real time and is based on the supply and demand at any given moment in time. Bitcoin value can be very volatile compared to long-standing established currencies (such as the US dollar), as it remains an emerging technology still in its infancy.

Unlike credit card networks or payment processing, Bitcoin isn’t owned by a company or individual, yet is the first open payment system in history designed to be utilized via the internet.

Bitcoin Mining for Fun and Profit

All bitcoins have been mined into their existence. This process serves a dual purpose not only to add transactions to the bitcoin blockchain but also to release new bitcoins into the free market. Bitcoin mining consists of transaction compiling into blocks to solve a puzzle. The first participant to address the problem places the next into the blockchain and reaps the reward for doing so.

A decentralized process, Bitcoin mining is a task that can be performed by anyone with internet connection and appropriate computer hardware. Network security is dependent on the decentralization, as decisions are made on consensus. Mining power in the Bitcoin network is reliant on the miner incentive (block reward and transaction fees). Block rewards currently provide most of the miner incentives. Now, transaction costs represent less than one percent of all mining revenues.

The difficulty of Bitcoin mining is correlated directly with the effort being put into the extraction process across the Bitcoin network. The bitcoin network automatically adjusts mining difficulty every few weeks with the aim to maintain block discovery rate constant. More needed computing power means the challenge to mine is more complicated, maintaining barriers to entry and ensuring that mining doesn’t get too saturated or simplistic. Most of the operational cost for these Bitcoin miners come from hardware and electricity.

What are Bitcoin Exchanges? How Do I Choose One?

A Bitcoin exchange is a digitally-constructed, secure marketplace where cryptocurrency traders can collectively or individually purchase and sell bitcoins. These purchases and sales are made between different “fiat currencies” (another term for legal tenders such as the US dollar or Japanese yen) and various altcoins (for example, trading Bitcoin for Ethereum or Litecoin).

Bitcoin, which uses the currency ticker symbol BTC, is the most popularly traded crypto-coin on almost all current cryptocurrency exchanges.

Bitcoin exchanges work to match cryptocurrency buyers with Bitcoin sellers. Very much like a standard stock exchange, cryptocurrency traders have the option to purchase and sell Bitcoin by either inputting a market order or a limit order.

  • If an operator selects a market order, they are authorizing the Bitcoin exchange to trade their owned bitcoins or another cryptocurrency at the most compelling price point available on the exchange.
  • If a trader selects a limit order, they are directing the Bitcoin exchange to trade bitcoins for a price that is set below the current asking price if they are buying, or above the current bid if they are selling.

Two of the best, most reliable exchanges for the purchase and sale of bitcoin cryptocurrencies are Coinbase and Kraken. More information on these two exchanges can be found in the Bitcoin Exchanges section of the List of The Most Reliable and Highest Quality Exchanges article.

What is A Bitcoin Wallet? Which Bitcoin Wallets are Best?

Very similar in theory to typical wallets in which you put currency and secure in your pocket or purse, a bitcoin wallet is used to store quantities of bitcoin, all the associated information for your bitcoins. The difference between the two wallets comes from the concept of a crypto wallet storing collections of private and secure transaction keys. Typically, a bitcoin wallet is heavily encrypted and password protected for the purposes of preventing unauthorized access to the wallet for malicious purposes.

Unlike the actual bitcoin network or blockchain, a bitcoin wallet is controlled solely by its owner or owners. This is in place of being fully distributed and shared as the blockchain is. It is extremely important to keep tabs on your bitcoin wallet and to keep it safe if you opt for a physical form of wallet such as a thumb drive.

The most effective type of wallet for those who are not concerned with having the Fort Knox of wallets is an online version, for example Coinbase’s wallet. If you’d like to step up, the next level would be a mobile wallet where the transactions are stored offline on your phone. The hardcore option is a desktop or hardware wallet, but these run the risk of being destroyed and lost forever without a backup.

The Choosing the Correct Type of Wallet for your Coins article has far more information on the various types of cryptocurrency wallets available, as well as which work best for which situation, including bitcoin. Now, there are several kinds of bitcoin wallets are available, know more about them as followed:

  • Software wallets: Software wallet is a kind of bitcoin application developed and supported by the Bitcoin Foundation. It sits on your own computer’s hard drive, allows you clearly check your balance at any given time.
  • Hardware wallets: Hardware wallet generally refers to a physical and portable device, can be used to store and spend your bitcoins. Internet connection is required as long as you want to spend your bitcoin.
  • Paper wallets: Paper wallet is deemed as a cold storage, the most secure method to store your bitcoins. It doesn’t need to be online the whole time until when you want to spend your bitcoins,which means an account being offline.
  • Web Wallets: Web wallet refers to the third-party bitcoin wallet services, including Bitcoin exchanges, dedicated wallet service, mobile wallets, and more. No matter which kind of wallet you prefer, securing wallet and keeping your funds safe are essential things to take into account.

How to Buy and Store Bitcoins?

One thing that you may consider when you’re interested in investing bitcoin is how to obtain bitcoins. There are a lot of methods you can find online, but the fastest and most obvious method is to buy them. But where can you buy a digital token so as to exchange for physical money? Where can you expressly know how current market prices are fluctuating? The answers are exchanges, which platforms are built for exchanging your local currency to get foreign currency, exchanging from and to physical currency to and from digital currency, take a bitcoin for example.

Bitcoin exchanges are just the places wherein people can use their physical money to exchange and trade for bitcoins. It also allows people to exchange bitcoin to a global currency. In most cases, a bitcoin exchange is supported by banks or other regulated institutions, takes the form of a website. There are a lot of choice of providers, you can discover the most visited bitcoin exchanges in the world from the Bitcoin.org website

The basic way to create an account from bitcoin exchange (the actual requirement will be different according to the exchange you sign up to):

  • Enter the required basic information to complete your sign up, such as name, address,phone number,and more.
  • Active your account through an e-mail in your mailbox.
  • After the activation, the specific registration process begins.

Due to some legal reasons, bitcoin exchanges will require you submit some very delicate information:

  • Confirm your phone number: When you start your registration process, Bitcoin exchange will require you submit a valid phone number and then send you a text message with a code for conducting a verification process. Once done, this phone number can be used for an account’s password-recovery process, or in case of an emergency.
  • Provide your personal ID: One of the necessary step to complete your registration is to verify your identity by submitting a copy of personal identification, such as ID, passport, or driver’s license. The actual demands in terms of the bitcoin exchange platform you’re using.

World Cryptocurrency: Bitcoin

We now live in a world of advancement and innovation. We tend to find new ways to cope with the technology that has been part of our daily activities. In the past few years, many enterprising individuals have developed several kinds of technologies that we are currently using today. Cellphones, touch pads, radios, televisions, refrigerators, washing machines, and even computers are updated now and then, proving that we are constantly coming up with all new methods to improve our current way of life.

Based on what we know, computers are the most influential piece of technology that exists today. Everyone from students, teachers, graphic designers, and businesses owners use computers to make their work easier.

This supports the statement that computers can influence even the smallest system in the world. Little do we know that when it comes to technology, computers are not the most influential tool that we can use to innovating the whole world.

Internet and Business

The internet is the most influential system in the existence of mankind. It holds almost 90% of the mind of the human population. The internet is very fascinating, and it can do many things that even we humans can’t do.

This is very alarming and very interesting at the same time. With the help of the internet, we can be connected to the whole world with a single click of a mouse. The internet also enables us to uncover the truth and gain more knowledge deeper that what was previously hidden from earlier generations.

Businesses can be run by the internet. Almost all of the businesses today are run automatically or by robots, which is becoming a normal thing as the years pass by. We are already in the 21st century, and it is expected that most of the things that man do are connected to the internet. The internet is a source of infinite data, and if it can be used in business, it can, therefore be used to send and receive money.

Why You Should Use Bitcoins

Bitcoins are cryptocurrency that is completely essential. These coins are designed to be “self-contained” for their value, with no need for banks to progress and store the cryptocurrency.

Once you own bitcoins, they act like physical gold coins: they possess value and trade just as if they were nuggets of gold in your pocket. You can use your bitcoins to purchase goods and services online, or you can tuck them away and hope that their value increases over the years. Bitcoins are traded from one personal wallet to another.

For all intents and purposes, bitcoins are forgery-resistant. It is so computationally-intensive to create a bitcoin that it isn’t financially worth it for counterfeiters to manipulate the system. Our future digital crypto currency varies daily, and you can check sites like Coindesk to see today’s value. There are currently more than two billion dollars’ worth of bitcoins in existence.

The Rise of Bitcoins

Money is not only defined by tangibility. Money can also be intangible depending on how it is used. At the end of the day, the only thing that counts is the idea of purchasing power. Money plays a huge role in society. By definition, we say that money is the blood of a nation. Money can control both humans and the company itself.

Bitcoins: Currency, Wallets, and Private Keys

Bitcoins are the future of digital currency that every single person can have. Every bitcoin’s price changes every day but it can range up to $200 per bitcoin or more. This future digital currency can also be earned as a reward for payment processing work in which users offer their computing power to carefully verify and record payments that go into a public ledger.

Bitcoins can be exchanged for other currencies, products, and services. This activity is called mining, and miners are rewarded with transaction fees and newly created bitcoins. Miners are the creators of bitcoins who are meticulous when it comes to mathematical computations, and its use is policed by millions of computer users. In essence, the bitcoin is electricity converted into long strings of code that have money value that varies every day.

This future digital currency comes with a bitcoin wallet, which is a software that enables users to receive, store, and send bitcoins by empowering users to create and manage a collection of private keys.

Private keys are numbers that users keep a secret using bitcoin wallet that no one can hack or understand, and only a computer can translate it. It also enables bitcoin owners to move bitcoins by solving a math problem that the Bitcoin network can validate.

Use of Bitcoins

From a user point of view, the bitcoin is something similar to a computer program or mobile application that provides a personal Bitcoin wallet and enables a user to send and receive bitcoins. Having a bitcoin is great and can make you rich, but the monetary equivalent of one bitcoin changes every day. It may increase at a fast pace or can also decrease its value depending or the mining program you have.

Behind the immense world of money or crypto currency, the bitcoin network is sharing a massive public ledger called “Block Chain.” The ledger contains every transaction ever processed, which enables a user’s computer to verify the validity of each transaction. You can buy whatever you want via bitcoin for it has a value in every currency in the world. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, therefore allowing all users to have full control over sending bitcoins.

The Future of Bitcoins

Bitcoin is slowly changing the way our society works, and this crypto currency is progressively altering more of the market share of legacy banking institutions in areas such as remittances, micropayments, peer-to-peer lending, and the exchange of stocks and securities. Transactions are bitcoins is easier than any other bank. The process has already begun and it is continuously growing as time passes by. Consider NASDAQ’s support of Open Assets/Colored Coins for the transaction of securities, NYSE’s investment in coinbase and more. Our old money or currency risks dying out lest it embraces new protocols such as our so called future crypto currency, the bitcoin.

This future money is a strong currency: it thrives on the internet, it frees it users from 3rd parties, it saves merchants money, it is deflationary, its code can be audited by all, its developers work tirelessly to improve upon it, and the list goes on.

A Brief Reference: