It is a cryptocurrency designed so that it cannot be copied or counterfeited. Thus, it operates freely from government control or central authority. Though many first-world nations don't recognize BTC as legal tender for circulation, the cryptocurrency can still be purchased and used globally to easily buy goods and services online and make transactions in the real world. When you trade it, you will put down fiat currency in return for it or vice versa.
Understanding Bitcoin
It is a cryptocurrency with no central authority and can be purchased, sold, or traded easily. You can decide what amount of it you want to spend or receive, for example, $1, $10, or even $1 million. It doesn't matter; as long as you're willing to trade fiat (real money) for Bitcoin or vice versa, you'll be able to purchase goods and services online and make transactions in the real world anytime.
It came into existence in 2009 when Satoshi Nakamoto released the first 'version' of it on the web. Satoshi describes the introduction of this cryptcurrency with the following words: "Bitcoin is an experimental, distributed, peer-to-peer digital currency that enables instant payments to anyone, anywhere in the world. It uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network."
Blockchain Technology
Its network is powered by a decentralized service called the blockchain, which uses cryptography to record transactions and confirm them. The blockchain also allows for one-time signatures that link transactions to the signed private key of the sender. Therefore, you can trace your them to the moment they were earned. You can also verify transactions on the blockchain, a public ledger that serves as proof of all transactions ever completed.
Bitcoin Mining
Its network has no central authority, but with no central authorities, it has no central point of failure either. Therefore, the network must rely on its users' machines or networks to secure the blockchain and the entire currency.
Bitcoin mining is a process that involves the use of computers or workstations to solve complex algorithms for cryptocurrencies via a proof-of-work system. This process makes it difficult for non-mined BTCs to be created. This means that all of them that exist today have already been mined from somewhere else through hard work and technical innovation by miners. The more miners on the network, and therefore the greater security provided by them, the safer the currency become overall in general.
Buying Bitcoins
You can purchase them in any amount you want, but you'll need to do your homework before deciding on a payment method. There are many ways to buy it, and the most common include using your bank account or credit/debit card. For example, Coinbase allows you to buy them with cash from a local bank account via ACH transfer. If you have USD in your bank account and don't have time to wait (because of bank processing times), this is the best way to start with BTCs instantly.
The way you purchase is different in every country, but generally, you will need to provide some personal information to receive your account ID and a wallet address. Once you have this information, you can create a "wallet," an online digital bank. The wallet will allow you to lock down your money in your digital BTCs bank by using 2-of-3 or multi-signature technology. This ensures that only the private key can access this money, which helps prevent illicit or criminal activity by stolen computers and identities. Some wallets also provide a feature that allows users to send alerts of incoming payments (called confirmations) from their wallets.
Trading BTC
It has no set value. By definition, it is worth what people are willing to pay for it. For example, you can sell 10 of them and use that money to purchase a car online. The car's value will be what you agreed on with the seller (for example, $10). Note that it skyrocketed in 2017, with the price reaching over $19000 at the end of 2017. However, market fluctuations are common. Therefore, if you decide to sell yours today or in a few weeks, there's no guarantee that their value will be the same as when you bought them or even close because of volatility. However, you can use tools to help predict their prices.
Bitcoin Wallet
The "wallet" is a virtual digital bank that allows you to store money, receive and send, and keep track of your transactions. This is the "key" you use in the Bitcoin universe. It's similar to a checking account in that it keeps track of your BTC balance, but it is not like a traditional bank account due to its built-in wallet features. With a wallet, you can create sub-accounts (wallet addresses) to send them to different recipients, or vice versa, and notify them of incoming payments. Most wallets also provide QR code scanner functionality so that users can quickly scan as they enter their wallets to transfer the currency.
How many Bitcoins are there?
There are 21 million of them that will ever exist. As of December 2022, just over 19 million of them have been mined. This means that in the future, there will be more BTCs available to purchase or trade as people start using them for commerce and services.
It's easy to buy and transact with this cryptocurrency, which is why they have become so popular. However, because they're relatively new, many people are still hesitant to use or invest in them for fear of fraud or being scammed out of their money. If you're looking to purchase your first batch of BTCs, I recommend you do much research before making a purchase decision. You'll find several online guides that offer tips about how to buy them anonymously or avoid outright scams; it's best to look at several sources before putting your hard-earned money into them.
