A Beginners Guide to Bitcoin: Everything You Need to Know!!!
The world is going digital, and so does the currency system in the world. A few years back, no one would have imagined that we could be using digital currency in 2020. With the invention of Bitcoins in the year 2009, the crypto world has gone crazy, and an innumerable number of cryptocurrencies are being launched daily.
One of the most renowned cryptocurrencies is bitcoin, and in this article, we will try to discover anything and everything about bitcoins.
What is bitcoin?
Merely speaking, bitcoins can be described as a digital form of cash. But, unlike the traditional currencies in the control of a central authority like the government or the central bank, bitcoins are not controlled by any central authority.
The financial system that runs the functioning of bitcoins is run by thousands and thousands of computers distributed worldwide.
Anyone from any part of the world can easily participate in the bitcoin ecosystem by downloading this open-source software.
Bitcoin was launched in 2009, and it provides users with an ability to make transactions digitally, without the availability of physical currencies in their wallet.
Unlike the traditional fiat currencies you have in your wallets, the bitcoins are not stored in a physical form.
Instead, the bitcoins always remain in digital format. The best part about bitcoins is that it can’t be censored; the same fund can’t be spent more than once, and thus, there are no chances of counterfeiting when it comes to using bitcoins.
In addition to this, the quick transactions in bitcoins can be made anytime, anywhere you want.
What are the different uses of bitcoins?
Bitcoins can be used for the same purposes as traditional currencies. Anyone with an internet connection can use bitcoin to make transactions and purchase anything they want.
The world is slowly accepting bitcoin as a form of payment, and it is expected to get global currency recognition soon.
The best part about bitcoin is that unlike traditional currencies, where you have to pay the conversion fee if you send money from one country to another, bitcoins have universal acceptance.
You don’t have to pay any additional amount when you are paying in bitcoins.
What makes bitcoin valuable?
All types of currencies have certain factors and properties that make it valuable. Bitcoin has the same properties too. The scarcity, durability, transportability, and ease of payment make bitcoin useful.
Bitcoin is a decentralized form of currency and censorship-resistant, secure, and borderless. These properties make bitcoins one of the most liked and renowned digital currencies.
The quality of bitcoins has made it appealing for different use cases. It can be easily used for international payments, where individuals don’t have to reveal their identities when making transactions in bitcoins.
Even if you don’t want to spend bitcoins for everyday use, you can hold it for a long time.
Some investors also call bitcoin a store of value. Since bitcoins are scarce and bitcoin mining is not too easy, bitcoin trading app sometimes compared to silver and gold.
Thus, all these properties and the global availability and high liquidity feature of bitcoins make it one of the best cryptocurrencies available in the crypto world.
How does bitcoin work?
Bitcoin works by a technology that is known as the blockchain technology. People who are on the network have identical copies of the blockchain stored on their digital devices. All participants connect, and they synchronize the new information.
Suppose any user makes a payment in bitcoin. In that case, the information is directly broadcasted by the peer-to-peer network system. Thus, there is no centralized institution’s involvement like a central bank or government to process the transfer.
To add new information and new bitcoins, the network uses a process called bitcoin mining. Through the process of bitcoin mining, new blocks of bitcoins are added to the system.
Also Read: Working of Bitcoins!!!
What is Blockchain?
Blockchain is a ledger that stores all information about bitcoins. This ledger is appended only. This means that data can only be added to it. Once any news is added to the blockchain network, it can be pretty tricky to change it or modify it in the future.
If you are interested in knowing about bitcoins and how everything works around bitcoins, this can be an excellent point to start with.
Know everything about bitcoin before you begin investing in bitcoins.