What Is Bit Coin?
What Is BitCoin
Are you wondering what is bitcoin? Well, a bitcoin is a form of currency that is digital in nature and held electronically. This cryptocurrency is not printable. Instead, different people create it using mathematical solving software across the world.
Because of the digital and electronic nature of Bitcoin, the currency is decentralized and ungoverned by any central authority. It can be used anywhere by anyone who owns it as long as the payment is made online.
The founder of Bitcoin is not known precisely. However, the developer of the cryptocurrency went by the name Satoshi Nakamoto; that is all the world knows of this person.
Getting the bitcoins
Bitcoin users from all over the world control the currency. The software used to create it is open source. For you to utilize this money, however, you have to acquire and own it. This can happen in two different ways outlined below.
Mining
One of the major ways of getting bitcoin is to mine for it. This process entails getting people to compete in solving mathematical puzzles using their computers. Whoever provides the accurate solution is awarded a specified number of bitcoins.
The mathematical puzzles are responsible for the creation of the cryptocurrency. However, the current protocol dictates that the number of bitcoins that can be created by miners cannot exceed 21 million. Each of these coins can be divided into much smaller units, with the smallest being a Satoshi.
Exchange buying
The other main way of obtaining bitcoins is by purchasing them on the exchange. With the increasing popularity of the coins, several marketplaces have been established to allow for their purchase. You can use a variety of world currencies to buy bitcoins for online payment.
How do bitcoins work?
Once you acquire bitcoins, you have to store them somewhere. Currently, bitcoins can be stored in a digital wallet usually known as an e-wallet. These portfolios act as a virtual bank account of some kind. You can have your e-wallet stored either on your computer or the cloud. What you need to remember, however, is that while the virtual bank accounts may be free, they are not insured. Viruses may destroy the wallets, accidentally deleted, or hacked into. However, many of them are relatively safe.
When you want to pay for products, you need to select the bitcoin option and then authorize payment via your e-wallet. Your wallet ID will be used for verification thus assuring you of anonymity. However, each transaction you make will be logged into a public ledger. This is used to verify that the bitcoin transaction being made is authentic and has been confirmed by you.
Currently, you can use Bitcoin for a large variety of activities. You can use them to buy online services and even pay for products online even when the products will be acquired offline.
Why use Bitcoin?
- Bitcoin has become popular because it offers multiple benefits to its users. Some of those benefits are outlined below.
- Bitcoins are not subject to any geographical boundaries. You can use them from anywhere in the world.
- Bitcoin payments are private and anonymous. People do not need to know what you are buying.
- Bitcoin allows for safe and secure transactions due to the verification measures put in place.
- Bitcoin payments are made at very low or no fees at all, which is money save on both ends
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