Bitcoin is one of the most popular topics on the Internet today, but many people find it too difficult or complicated to understand and participate. This article will cover the basics of Bitcoin simply for every level of understanding.
What is Bitcoin?
Simply, Bitcoin is just a digital currency. You can’t touch your hands like you would any other money gadget. It is not owned or operated by any official company or organization, such as a bank or government. This means it is managed “decentralized.”
Bitcoin is easy to use and operate. It can be sent from person to person very quickly and safely. It can be sent to anyone anywhere in the world using Bitcoin. Because Bitcoin is decentralized, its value is determined by Bitcoin users. There is no official government or bank that can governor adjust its price.
Bitcoin creator and who invented it
Bitcoin was created and mined by someone under the alias Satoshi Nakamoto. This started in 2009 and most people today are not sure who this Satoshi Nakamoto is or who. He left the project in 2010 and since then you haven’t heard from the public about him ever since.
Since then, Bitcoin’s development has been contributed and led by a large group of developers around the world. The changes to Bitcoin’s underlying technology were voted on by people called “Minning – miners,” who operate specialized computers used to maintain the Bitcoin network.
How Bitcoin was created and mined
Mining is the process that allows Bitcoin to be applied in areas of the current world. It is an idea similar to traditional mining, but the process uses computational power. Those computers are tasked with maintaining the integrity of the Bitcoin network by checking encryption and performing other tasks. In return, miners sometimes find a newly minted Bitcoin “blockchain” that they receive in exchange for running those computers.
Today, bitcoin mining requires a lot of computing power and electricity, making it more difficult to make a profit, especially for small mining companies. Many criticisms and strong interest have focused on Bitcoin mining, as electricity consumption has increased to 0.3% of the world’s total electricity consumption. Discussing solving that problem takes place in the cryptocurrency community all the time.
Bitcoin was designed to eventually generate a total of 21 million Bitcoins over the next century. Up to the present time, nearly 18 million Bitcoins have been produced, the rest is produced slower and slower until the last part of Bitcoin is produced at the beginning of the century 22. This is a form of anhydrous Rare artificial to help increase the value of Bitcoin over time.
How Bitcoin is bought and sold
The best part about Bitcoin is that it is easy to buy and sell. The easiest way to buy Bitcoin is to buy it online, but there are also Bitcoin ATMs in some parts of the world. Bitcoin ATMs may be convenient in some ways, but most Bitcoin transactions occur online at established exchanges. Be sure to carry out your own research and diligence wherever you buy or sell Bitcoin.
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How Bitcoin can be stored
Bitcoin is stored in wallets, just like traditional forms of currency, except Bitcoin wallets are digital currencies, meaning they reside on computers. Each of these digital wallets has its own digital address which is also public. These addresses consist of a series of letters and numbers that are 30 or more characters long. You control and store your address.
The creation of digital wallets is usually free and anyone can have an unlimited number of wallets. There are many different types of wallets to choose from and each has a different level of security. There are wallets you run on your computer, some wallets run on dedicated hardware (there are fees) and so do online wallets. As with everything in the cryptocurrency world, do your own homework and diligence when choosing a wallet.
Bitcoin transaction process and how long it takes
When people participate in a Bitcoin transaction, the transaction is digitally signed. This is to ensure that transactions are secure and encrypted. Encryption is often just a term that implies that it is very difficult for someone to hack or tamper with the transaction.
Once the transaction has been signed by the Bitcoin sender, it will enter the Bitcoin network where it is included in a block. That block is closed when miners find a new block and that is when all transactions included in the previous block are considered completed. Transactions can be viewed by the holders of each wallet and by a so-called block explorer. Block explorer allows anyone to see all transactions made using Bitcoin.
On average, it takes about 10 minutes to complete a block and confirm that the Bitcoin transaction has been completed. Technically, it is not official until 100 blocks have included a certain transaction. In practice, however, most parties consider it to be official once it has been included in two or three blocks. It is just one more step to help ensure the security and integrity of the network.
How much does it cost to sell a Bitcoin?
When people send Bitcoin, the only thing they pay is the miner’s fee. This fee is required regardless of where or to whom Bitcoin is deposited. This fee is added to the cost of the transaction and it is paid to the miner who finds the first block of the transaction.
Fees can vary, and do so primarily according to the size of the network. The more you are willing to pay, the higher priority Bitcoin mining tools will execute your transaction. Even so, Bitcoin transactions are very cheap, much less than traditional bank transfer or money transfers and sometimes only by one percent.
Buy and sell less than one Bitcoin
A Bitcoin has 8 numbers after a decimal. The smallest Bitcoin someone can buy is 0.00000001 Bitcoin. This unique amount is called Satoshi, named after the creator of Bitcoin. While it is possible to buy and deposit this amount, it would be wise to avoid it because the transaction fee, or mining fee, will be higher than the deposited amount.
Where Bitcoin is accepted and what to buy with it
Many businesses and shops around the world some accept and hold Bitcoin. That said, Bitcoin is still not really used as much as traditional money and accepting as a real currency remains one of the challenges for the Bitcoin community. Some companies help this, however, including Xapo and Bitpay, companies that allow credit cards to be connected to Bitcoin wallets. This type of convenience is driving adoption rates, but it’s still an ongoing challenge.
As mentioned above, some retailers accept Bitcoin, with Overstock.com being one of the largest retailers. There are also often rumors of other companies considering Bitcoin, and even local retailers have used it as a payment tool. You can help promote the application by asking your local retailers to accept it.
Why the price of Bitcoin changed
As mentioned above, Bitcoin is exchanged and used on an open and free market. It is not operated by any official bank or government. The price of Bitcoin varies based on supply and demand. In some cases, it may be based on instability and economic conditions around the world. Some political events can trigger the value of Bitcoin to be high or low.
Conclusion: Should Bitcoin be purchased?
Most people are still skeptical of Bitcoin, but it has been proven that Bitcoin is very safe and secure because of the encryption used in every transaction. According to Satoshi Nakamoto himself, Bitcoin defeated middlemen and created a safer way for people to exchange money and minimize fraud. If someone wants something safe, secure and fast, they should try Bitcoin or digital money.