What is Bitcoin and How Does it Work?

bitcoin

What is Bitcoin and How Does it Work?

 

 

It is a digital currency that was first reported in 2009 when a person or group of people, named Satoshi Nakamoto claimed to make it. The exact information regarding those who made is still unclear. It offers no transaction money as compared to other currencies. Since it is centralized, and no government officials can control it.

There is no physical shape of bitcoin, the one you see in multiple images is just a picture used by media. Although, it does not mean anyone can program or hack a certain app and make bitcoin. There is a controlled mechanism named blockchain technology which helps in regulating and keeping a track of all the transactions. Multiple billionaires and social media personalities also own many bitcoins. BTC is used to label instead of bitcoin in many apps. For transactions, an authentic app Binance is used by millions of users.

What is Bitcoin:

It is basically a group of data on a different computer, all regulated by blockchain technology. Metaphorically, blockchain is like stacking up blocks in a chain manner. Although, the new one should be relevant to the previous ones. Hence, every computer is linked in this manner.

So, those who own a bitcoin “node” or no, can see the transactions going on anywhere in the world. In January there were almost 12k bitcoin nodes, which must have grown up till now.

Bitcoin mining:

This process results in new coins in the market. This requires solving an algorithm of bitcoin so that a new block is discovered in it’s blockchain. So, it needs a specific computer with a certain ram, rom, hard drives, graphic cards, and power supply to run smoothly.

Finding a new block was rewarded by 50 bitcoins in May 2009. However, it is lowered down to 6.25 bitcoin in 2021. The advanced mining processors called mining rigs are used in the computer used in mining.

A single bitcoin can be divided into many portions. The simplest and smallest part is called Satoshi. Many influencers believe that there may be multiple decimals of a bitcoin in near future.

How it all started- history:

Aug 2008:

Bitcoin.org was registered as a domain. Nowadays, this is protected by hiding the registrar’s name. hence, no one knows the actual owner.

Oct 2008:

A person or group of persons openly claimed that there is a digital currency with no third-party involvement.

Jan 2009:

The first block called block 0 was mined. It was the genesis block. Later on, a crypto app was made. And the mining of other blocks started.

How to use bitcoin:

In the united states, many people have started using bitcoin as a source of payment. Although, the brands and companies that accept are still limited. So, you can read a sign that says, bitcoin accepted here to find out whether they will accept or not.

Those brands which accept bitcoin were Tesla, overstock, and Twitch. Some locals also accept it, but you may have to ask before.

Moreover, PayPal announced that it might start cryptocurrency transactions at the end of this year. Although, we have no further update regarding this news.

Also, some apps provide services to buy a cryptocurrency. You only have to link up your debit card or credit card and link up. It is also reported that in many small countries, people used to trade bitcoin for certain items.

How to buy a bitcoin:

Many people buy bitcoins through exchanges app like Coinbase. It allows you to sell, hold, and buy different currencies. Firstly, you will be needing to verify your account and give necessary information regarding your bank card or debit card. There are also unsafe ways of buying bitcoin through broker apps.

No matter where you buy it, you must have a wallet to store and trade. The hot wallet is the one that holds your coin in an app or a cloud, it can also be labeled as an online wallet. However, the mobile wallet is the one that is not connected to the internet. It is more preferred to store bitcoin.

Another important feature is that bitcoin is expensive. Nowadays, you can buy infractions. There might be some fees from the vendors. One thing to keep in mind that it does not take seconds like your banking transactions. It takes almost 10 to 20 minutes when it is approved by all the minors so waits this much time when you make a transaction.

 

What are the risks of investing in bitcoin?

For it’s initial stages, it was created as an alternate for money. However, some investors took it as an opportunity to invest and than sell it after the prices go up. Thus, a huge amount of people uses it for investment purpose.

 

#1  Regulatory risk:

Investing your hard-earned money is not for everyone, especially those who can not handle some dips. As for now, it is considered as a rival for legal currency (as it is not legal in many countries), so many people can and might be using it for money laundering, black money into white. So, this results in the government banning it.

 

#2 Security risks:

Most people do not take mining notes while buying and sell it. in that way, a coin s circulated without a history. So, if someone hacks that coin, he can access the encryption key and tractor all the funds into his accounts. The only drawback is that the payments are quick and irreversible.

 

#3 Fraud risk:

There is a private key encryption code and key with each coin. However, multiple people have been reported that made false transaction slips and frauded some people. They take the money and disappear without leaving any digital track.

 

 

Conclusion:

In general, if we look at the progress of bitcoin in just a few years is quite amazing. However, it is suggested that you should only invest that money which is just getting frozen up in your bank accounts, so you can hold for a long time. Moreover, if you are looking for an emotional support animal to get your mind off this daily hectic life. Contact getyourpetcertified.com and get an emotional support animal letter today.

 

 

Action Point

I know you might agree with some of the points that I have raised in this article. You might not agree with some of the issues raised. Let me know your views about the topic discussed. We will appreciate it if you can drop your comment. Thanks in anticipation.

Download Our App.

CEHNigeria On Google Playstore       

Download Our Blog App On Google Playstore.

 

GET SEOPOZ. OUTSMART YOUR BLOG COMPETITORS        

Have a deeper understanding of Google Search Console. Joint SEOPOZ for free.

Joint Our Whatsapp Group Here

Joint Our Whatsapp Group        

Follow Us On Twitter and I will Follow Back

Follow Us On Twitter        

Kindly follow me on Twitter and I promise I will follow back. Aside you will get updated when we post new articles.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


CommentLuv badge