What is Bitcoin Cryptocurrency?

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It is a digital coin that has gold-like value. Bitcoin is easy-to-use, stored in cryptographic wallet addresses, and can be securely transferred from one point (i.e. wallets) to another.

Bitcoin crypto value is basically calculated in USD rate anyways. Bitcoin is the first digital and decentralized currency, computerized (thus, virtual and without any physical form).

It’s not owned by any central bank, government or any form of central financial entity.

I deemed it right to write a comprehensive bitcoin guide for dummies, to help you understand fully, how Bitcoin originated to exist strongly, and firstly before all other alternating cryptocurrencies in the fintech market.

It’s after this that you’ll get to fully understand how the whole digital cryptocurrency market work, as well as the BTC cryptocurrency.

Bitcoins (and other decentralized cryptocurrencies) are used for the exchange between a “unit of account” on one hand and (virtual or real) goods and services on the other.

The first two functions normally attributed to money can be said to also be functions of decentralized cryptocurrencies.

An argument can be made that the last function, that of a “store of value” can be attributed to Bitcoin and other decentralized cryptocurrencies.

This last feature has raised major concerns may be dangerously close to that of an “investment instrument” (thoroughly regulated in almost all legal systems).

The argument that Bitcoin can be considered to have the function of ‘store of value’, is usually deducted from the deflationary monetary policy of the currency, and the tendency for decreased market volatility in value over time.

This is mostly considered as the market capitalization gets bigger, and more users joins every day, while investing in crypto projects.

Due to the fact that bitcoin is decentralized, the value is determined in a free market without manipulations from any financial central bodies that mostly hold fiat currencies.

Why is Bitcoin not centralized?

In the world today, bodies like major banks alongside governments, must stand behind any currency to maintain its distribution and economical stability.

The fact is that, we’re currently living in the Debt Economy Era, where central banks including other financial body of most countries print new bills (fiat money) at will, and without tangibly having linkage to any base asset (e.g. Gold).

This is exactly one of those practices causing inflation in most countries’ economy up til date: unpredictable rises continues, and the prints gets worn-out over time.

Note: Before this era, fiat currencies was not controlled by any government, or central bank which made people of then, to have totally control over how much they can control or hold just like bitcoin.

Who created Bitcoin and when?

Bitcoin is a cryptocurrency that is established by Satoshi Nakamoto, but there are still disputes to who he was since when BTC evolved.

However, since 2009, the BTC Project has been gaining popularity and also accumulating users worldwide. Enthusiasts also helped by contributing their time and efforts in developing and distributing this particular asset throughout the whole globe.

How was bitcoin created?

The bitcoin creation has exactly the same analogy like gold mining, and this is to say that, bitcoin first came into existence through the same process known as mining (Popularly called Bitcoin Mining).

Where does bitcoin come from?

However, the term ‘Bitcoin Mining‘ necessarily, does not mean that you have to start digging the earth in search to find bitcoin just like the way gold is been mined and discovered.

In bitcoin’s case, the mining is actually done using some couple of special computer powers and gadgets to solve some mathematical calculations involved, which in return is rewarded by the created bitcoin.

The computational power is exactly what determines how fast bitcoin is been created as the mathematical solutions creates what is known as block in the network (blockchain).

This is also the environment that makes transfer of Bitcoin swift for existence.

How to get bitcoins

Bitcoin distribution is simply done with the process of buying the mined Bitcoins online, or Bitcoin ATMs (they can be located in some parts of the world).

Though, there are so many other ways you can still earn Bitcoins without investing, or buying it with your fiat currency.

How to store bitcoins

Bitcoins are stored in secured and dedicated cryptographic materials, digital software or devices called wallets, and each has a public address, which is used publicly to send and receive bitcoins.

This address is made of alphanumeric 30 character string of codes. There’s no cost, or limit to creating and having new wallets.

There are different types of wallets that can be used to store bitcoin cryptocurrency, without loosing it to theft or hacks.

How to transfer bitcoin into wallets

Bitcoin transactions are digitally signed and encrypted from the wallets that is sending it out with its private key (not distributive), and it gets broadcasted to the blockchain network on the internet, which then gets listed on the Block Explorer.

The transaction log keeps tracks of all bitcoin transactions made throughout its existence.

This log is also divided into blocks, and each of the blocks contains commands that guides the transaction till it’s closed after completed transactions.

Costs to transfer bitcoins

Miner’s fee is the only transaction cost for transferring bitcoin from one point to another (with physical distance being neglected entirely).

The fee is always paid to a miner for each order added to the blockchain to close the block during mining.

Comparing to the means of money transfers, bitcoin is always cheaper in a way, not minding how much that is involve in each transaction.

However, the fee is not fixed and most digital wallets automatically, can calculate the fee required for each transaction.

It’s necessarily to note that the higher the fee, the faster the transfer will become (i.e. your bitcoin transfer will be on the priority list that is handled by the miner who prefers to take the higher fee transactions).

How to send less than 1 Bitcoin

It is absolutely possible to send any amount of bitcoin, as long as, it doesn’t affect the miner’s fee (which may be very higher than the amount to be transferred) for the transfer.

The cryptocurrency has 8 numbers after the decimal point (i.e. the smallest bitcoin is 0.00000001 BTC), and the most unit of measurement for bitcoin is known as Satoshi. There is a post i wrote on how to buy bitcoins with USD.

Advice: Never send lower amount of bitcoins to avoid paying bigger amount of bitcoin to the miners than the amount that is being transferred.

What affects bitcoin price?

As we’ve stated earlier, bitcoin is an open source project and that means the price increase or decrease in price is affected by supply and demand just like every other market commodity.

Political news, FUD and most other events can result to the graphical shift in demand, or supply of the cryptocurrency.

Characteristic of BTC

Bitcoin can only be recognized by some certain characteristics, and that is what maintained its existence till date. Below are the existing characteristics of every bitcoin in the market.

Decentralized

Bitcoin is created by Satoshi Nakamoto to eliminate middle-man in every transaction. This means that every bitcoin transaction is independent of government authorities.

Everybody is part of the vast network, so long as you are involve in mining, trading or buying and selling of bitcoins. The money keeps moving, even if the network should have any kind of issue.

Anonymous

Bitcoin wallets are not linked to any financial network, or bodies.

Unlike financial institutions like banks that virtually knows everything about their clients: credit history, addresses, phone numbers, spending habits and so on, bitcoin transactions cannot be linked to any personally identity.

Most people just don’t like their financial transactions to be tracked, and monitored by anyone during business.

This is what also raised the argument that, drug dealing, and all other illegal business will be thriving with this kind of currency.

Fast transaction

Normally, bank transactions usually take up several days to get through, but bitcoin transactions are almost instant.

It normally take up-to some minutes to get to the other person’s wallet in any part of the world.

Lightening network has been introduced to the bitcoin blockchain, and it has help to even make the Bitcoin transactions even more faster. Now, transactions mostly take seconds to get through.

Transparent transactions

Even though tracing a particular bitcoin wallet address to a person is still very impossible, amount of bitcoins involved in any transaction can still be tracked in the blockchain – if it’s really necessary to do backward recording of transactions.

There are wallets that can still make every transaction anonymous in the blockchain. This is to say that, when you make use of this type of wallet to transfer bitcoin, your transaction cannot be traced in the blockchain.

Non-refundable

Once you send your bitcoin out to someone else’s wallet, there’s no way you can revert the transaction back. Unless the recipient agrees, or decides to send it back to you.

This feature was implemented to makes sure that no one will scam another person by claiming that they didn’t receive any coins in their wallet during transactions.

How to buy bitcoins?

Buying bitcoins is very easy and simple. Currently, there are decentralized bitcoin exchange platforms that you can use to buy any amount of bitcoin, depending on the present price value as the market worth is always volatile.

To learn how to buy bitcoin safely, without getting into the hands of scammers, I’ll advice you read an article based on how to buy bitcoins with USD

Is Bitcoin a good investment?

Most people thinks bitcoin is one of the normal ponzi scheme that appeared in a serious large scale. But I will tell you that this crypto is totally different from Ponzi, or even pyramid schemes.

It is simply another form of keeping values, just like the way you would keep Gold if you have one in your possession already.

Investing bitcoin cryptocurrency can actually make you rich and wealthy, especially right now that the price value is still highly volatile.

As you should know too, bitcoin is still waxing strong into the financial economy of countries, because it is not affected by any governmental policy.

It has no central body that controls it. You can acquire any amount, and HODL it till when you think you may need to convert it to money.


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Disclaimer: Being a cryptopreneur does not mean am also a qualified investment adviser, and may not have a vested interest in some projects, or businesses mentioned here. None of the content(s) on this blog is a licensed investment advice, nor is it an advice replacement from a certified financial planner.