Bitcoin Basics – Everything a Beginner Should Know | The Guardian Nigeria News

What do you think of when you hear or read something about Bitcoin? Some people think that this virtual currency is a bubble, a seedy payment method, or the financial future.

But Bitcoin is modern, decentralized virtual cash that enables people to transfer funds without intermediaries like governments and banks. Instead, this payment method uses a digital peer-to-peer network to confirm transfers between users directly.

Governments give, regulate and secure fiat money like the US dollar. However, peer-to-peer technology is what powers Bitcoin. This technology provides a network of computers or individuals and software controlled cryptography. This network creates a digital currency with a code to back it up, instead of items of physical value like silver and gold. Essentially, Bitcoin users don’t rely on trust in government agencies like fiat currency users.

Bitcoin history
Satoshi Nakamoto, an individual or a group, launched Bitcoin in 2009. Most people consider Bitcoin to be the first successful cryptocurrency. However, academic papers had discussed the concept of blockchain technology for decades. Satoshi realized that the world needs a digital payments system that has cryptographic evidence as the foundation, rather than relying on a white paper. Such a system would facilitate direct transactions between willing parties without involving a trusted third party.

Bitcoin has been used for over a decade, and several companies, including PayPal and Microsoft, are accepting it as a method of payment. The price has also risen sharply over the years. In April 2021, the price of Bitcoin hit the $ 65,000 mark. However, this virtual currency is very volatile.

Some people take advantage of this volatility to trade Bitcoin on crypto exchanges like the Bitcoin Revolution software. These are platforms where people buy bitcoins with fiat money and transfer it to their digital wallets. From there, they can use this currency to pay for services or keep them and wait for their value to rise. Or visit you bitcoin pro for more details.

How it works
Each bitcoin is a computer file that people with a digital wallet store on a smartphone or computer. Here is what you should know to understand how this virtual currency works.

  • Blockchain: This is the underlying technology that powers Bitcoin. It is open source code that creates a distributed and shared public ledger. Every Bitcoin transaction is a chained block in code that creates a permanent record. Ideally, blockchain is the heart of Bitcoin.
  • Public and private keys: people store bitcoins in digital wallets. Each wallet stores a private and a public key that the owner can use to digitally initiate and sign transactions to prove that he has authorized them.
  • Bitcoin miners: Miners are a group of members of the peer-to-peer platform who confirm transactions using powerful computers. Every miner deserves Bitcoin for putting his effort into this task.

How Bitcoin Makes Money
The value of this virtual currency follows the law of supply and demand. As the demand subsides and grows, the price is very volatile.

In addition, Bitcoin mining requires high investments in powerful computers and technical know-how. Hence, most of the people choose to buy bitcoins on crypto exchanges instead of mining them.

Is Bitcoin Buying Smart?
As already indicated, Bitcoin is a very volatile and speculative virtual currency. Whether or not the purchase is a smart move depends on your investment goals and your thoughts on the technology behind this virtual currency. Keep in mind that even stock trading sometimes has the same thrill as Bitcoin. But the increasing adoption and acceptance of this digital currency points to its potentially bright future. Hence, it is probably better to invest in this virtual currency than to ignore it but regret it later. Still, invest what you can lose and life will go on uninterruptedly.

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