Bitcoin is a powerful cryptocurrency that is in the form of digital public money. Technically, a Bitcoin is nothing but computing power which has been converted to code strings and now holds some value. Policed by millions of individuals called miner.
Let’s see a short video first before digging deep into the What is Bitcoin concept.
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Who created Bitcoin?
We are in a new era of possibilities, the concept of physical notes and currency was redefined when a cryptocurrency Bitcoin was created in 2009 by pseudonymous developer Satoshi Nakamoto. Little did the world know about the potential of Bitcoin, 10K bitcoins could buy only 2 pizzas back in 2010 but today they would be worth $100 million.
Features of Bitcoin:
- While the traditional currency can be produced by a central agency or a consortium cryptocurrency cannot be printed or produced as such. These currencies are produced or mined by massive and very high-end rigs which are often called mining rigs, what these rigs do is solve complex math problems or complex computations to obtain these virtual currencies.
- In earlier days Bitcoin mining could be done on average CPU’s but soon miners realized that a certain set of configurations produced better returns and thus mining became exclusive to the owners of rigs which consist of high-end hardware.
- The whole process of doing transactions on a bitcoin network is pretty lucid, it is too easy to set up. It takes a couple of seconds to start from scratch and make transactions using Bitcoins, what comes as a great fact is that, you are not required to pay any transaction fees with Bitcoins.
- Transparency in Bitcoin network is what makes it unique, when you operate on a Bitcoin network, every inch of the detail gets recorded in the public ledger. Though anyone can tell about the Bitcoins stored in a public address, they can’t just link that to you.
- No-returns: This can be the most intriguing part of the Bitcoins, they are literally non-repudiable, once you transact the Bitcoins, they are gone forever. You might ask the receiver to send your bitcoins back but it’s up to the consent of the receiver.
- It’d be true to say that no one can take the Bitcoin network down. Since the network operates on a decentralized appeal, not a single authority around the world can crackdown on Bitcoins. In short, your bitcoins are safe with you, no one can snatch them away.
- Today, more than $1 billion USD have flown into Bitcoin network, this has resulted in the formation of thousands of companies involving hundreds of users around the world.
If you’re wondering about what is bitcoin mining? Well, here are all of your answers:
A Bitcoin is generated when a person or a company makes use of an intelligent software power for the purpose of solving a mathematical puzzle. The puzzle aims to make the blockchain more secure. Wondering about how much time it takes to crack the puzzle? Well, it takes high computing power and long hours to do the task. Individuals around the world have purchased high-end processing units, they are cracking the puzzles, making blockchain more secure than ever and in the end, they are generating Bitcoins for themselves.
There a number of ways to mine bitcoin one of which is to acquire bitcoin mining hardware, today custom Bitcoin ASIC chips offer hundred times more performance than older system and mining with anything less will consume more electricity than one is likely to earn. Bitcoin mining contracts are also available for Bitcoin cloud mining which use their own rigs to produce bitcoins and hand out certain payouts to people who are under contract with them.
In simpler terms, the more computing power you provide, the more Bitcoins you earn. Bitcoin network provides the user with Bitcoins in exchange for the computational power a user provides. Out of 21 million bitcoins, about 14 million have been minted so people start digging!
Well if people are sending bitcoins to each all-time over the network a need for keeping a record of transaction arises so that a track is maintained of who paid what. All the transactions made in a period are collected and a block is formed, miners provide with the computational power to write them in a ledger.
The general ledger is associated with an array of blocks called blockchain, for the purpose of making sure that the block-chain intact, a hash is generated which is a typical blend of a random sequence of numbers and letters.
Every time a hash is successfully hashed the miner is rewarded with 25 bitcoins, producing a hash is very easy from a collection of data for a computer, however, this task is made difficult deliberately by Bitcoin network which demands has to look in a certain way.
None which is a random piece of data is used to create a hash, the hash has to fit the data if it doesn’t nonce is changed and the whole hashing process has to be repeated thus the competitors have assembled a whole range of rigs especially suited to this purpose.
Who controls the Bitcoin network?
What comes as a lucid fact is that, nobody in this world owns or can control the Bitcoin network platform. No governmental or financial institute can control the transactions done on the entire Bitcoin network. Bitcoin miners act as a verifier for the same transactions, even the scope of development in Bitcoin network is limited.
Developers today can’t just change the protocols involved in the Bitcoin network as the platform provides the flexibility of choosing any variant of any software out there to the miners. The consensus is what is required amidst the people involved in the Bitcoin network.
On the back-end, Bitcoin works on a public ledger, the ledger is also known as block-chain to many. As talked above, the ledger has every bit of information of the respective transactions. This helps the computer for the purpose of verifying the originality of every transaction.
Every Bitcoin transaction is aided by a unique digital signature, every sending address corresponds to a digital signature, by this a user can obtain an unprecedented control on the transactions related to their bitcoins.
Therefore, it can be said that there is not a single chance of fraud in Bitcoins. No information leak, no chargebacks etc. makes the network valuable.
How to acquire Bitcoins?
There is a term called “Bitcoin exchange” in the Bitcoin network. You can leverage the capabilities of any Bitcoin exchange for the purpose of buying or selling the Bitcoins. You can make transactions in different global currencies around the world and can acquire bitcoins with added ease.
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As individuals possessing Bitcoins, you can also send your bitcoins to your friends or relatives. With a tap on the screen of your smartphone or a click on your personal computer, you can send or receive Bitcoins from around the world in seconds.
Mining is the prime aspect of “mine” and earns Bitcoins, solve complex mathematical puzzles and earn bitcoins. According to the latest trend, a unique winner gets awarded 24 Bitcoins in every 10 minutes.
How can you keep your Bitcoins to yourself?
You must be thinking that it’s easy to acquire or mine bitcoins, but how can you keep your bitcoins to yourself? Well, as we know Bitcoin is a digital cryptocurrency, you are required to have a digital wallet to store them. A digital wallet can be on your computer, Mobile, cloud-based or it can be a hardware Wallet.
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Also Read: Best Hardware Wallets for Bitcoin
In other words, you can say a bitcoin wallet acts like a virtual bank and it provides the user with send & receives transaction amenities. You can pay for your goods and buy stuff by paying from your Bitcoin wallet directly. Unlike your bank accounts, your bitcoin wallets aren’t monitored by anyone.
Although every transaction gets piled up in public ledger, only digital wallet ID is what is accounted to know the sender as well as a receiver. The flexibility what Bitcoin provides is what makes them unique and in high demand.
To whom can we send the Bitcoins?
Anyone, provided the user at the receiver end has a digital wallet ID, you can send the Bitcoins to anyone around the world in just a blink of an eye. The flexibility of addresses is also there, one individual can have an array of addresses, one address for personal use, one for business and much more. On the receiver’s end, you can start spending Bitcoins as soon as you receive them.
What’s the real value of Bitcoin?
Today,(11/30/2017) one bitcoin approximately has a worth of 10109.30 US Dollar. It is expected that by the fiscal year 2030, the value may go as high as $500,000 USD per bitcoin. We can say the real reason for the popularity of Bitcoins today is the fact that they are seen as an investment by masses but not as a medium of making payments. People are preferring to earn & store bitcoins to trade them in future, this is what is increasing the demand.
There are individuals who had bought around 5000 bitcoins in 2009 for mere $27, rest is the story. Unlike traditional currency that is volatile, Bitcoins are stable and the demand of the same will only rise, considering the limited availability factor.
What can you buy with Bitcoins?
When you see Microsoft listing Bitcoin as an official method of payment for the majority of its products and services, it can be said that times are changing. The international Bitcoin network is booming, what comes as a great fact is that majority of retailer giants have started accepting Bitcoins in exchange for the goods as well as the services. Majority amidst the retailers are online e-commerce retailers, they are accepting cryptocurrency with added ease.
The times are gone where you had to struggle to find the enterprise accepting the Bitcoins. Now, as the demand of Bitcoins has risen, merchants are now accepting Bitcoins on a wider scale.
Let’s classify the ways you can buy things and spend your Bitcoins:
- You can make a purchase on your favorite major e-commerce sites like Alibaba and more. You can buy an array of products various categories and segments.
- You can also buy gold with your bitcoins since the current price of a bitcoin is roughly 10109.30 USD. You can buy an ounce of the gold. Gold is also a good option for your investment.
- You can book flights around the world. So, for those who love to travel, you may book you’re domestic as well as international flights by paying in Bitcoins.
- What comes as a great fact is that by spending Bitcoin, you can purchase other cryptocurrencies like Ethereum and more. Today, with one bitcoin you can buy around 68 Ethereum cryptocurrency units.
Let’s talk about the major companies that are accepting Bitcoins as a method of payment for their services or products:
- Microsoft: You can pay for your Windows or other Microsoft products with Bitcoins, a wide range of products is available in Microsoft store.
- Expedia: The major travel company is accepting Bitcoins and is providing the users with amenities like- hotel booking, air ticket booking, tours etc.
- Dell: The company is accepting bitcoins if you want to buy their products, a major range of electronics is available for the purchase of Bitcoin tag.
- Bloomberg: Online newspaper website Bloomberg is also accepting Bitcoins for their premium subscriptions.
The list is never-ending, as mentioned above, retailers are continuously adding Bitcoin as the option for making payment. We can say companies are accepting the global changes, Bitcoins are digging deep in the crux of the global economy. Small businesses too aren’t neglecting the action, various small shops & stores around the countries are accepting Bitcoins.
Transferring digital funds today have become easier, you can literally leverage the technology like Bitcoin network for making fast, secure and transparent payments. The times of ordinary bank transactions are expected to fade away. People are preferring bitcoins just because of the flexibility the cryptocurrency offers. From furniture to groceries, you can buy almost anything with bitcoins. With no transaction charge and the utmost level of security, Bitcoins can be your pick for making payments.
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