Here is a 7 minute zinger crash course on Bitcoin & Blockchain!
I am sure you must have been hearing a lot about Bitcoins & Blockchains lately. Until now, it was only “a buzz” or “something I don’t understand” kind of stuff. Hence I decided to read more about these and try to understand better. Here are the series of questions I was asking to my self and trying to find out suitable answers for those.
What is Bitcoin?
As per Wikipedia definitions — “ Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralised digital currency, as the system works without a central bank or single administrator.”
How the value is set?
Like any other entity, the value is set by two important factors — Supply & Demand.
How does the supply for Bitcoin work?
There is finite amount of Bitcoins that can be supplied or mined. The exact number is 21 Million.
What is Bitcoin mining?
Bitcoing Mining =Bitcoin Creation. As a bitcoin is created, it creates a ledger in Bitcoin block-chain
How does demand affect the prices?
- Demand increases price increases
- Demand decreases price decreases
Why Bitcoin value not stable?
- Relatively small market
- Relatively mall number of bitcoins
- Fear — is it real?
- Adoption — You cannot use Bitcoin everywhere like in your Shopping Market
- Acceptance — Most of the traditional banking systems does not accept Bitcoins
Could Bitcoin crash?
Maybe. Like any other market, Bitcoin’s price is decided by the buyer’s perception. If everyone is the world decided not to use it, the its value is ZERO. But it is unlikely to happen.
How do I get started with Bitcoins?
To do anything with Bitcoins, you need to get a Wallet. A wallet is an electronic wallet which can be downloaded on your cellphone, PC, Mac from https://bitcoin.org/en/choose-your-wallet
You can even use Hardware based wallets.
How much do I need to pay for Wallet?
You don’t need to spend anything to get a wallet.
How do I secure my wallet?
Please read guidelines on official website — https://bitcoin.org/en/secure-your-wallet
What does wallet do?
Like any other wallet, Bitcoins wallet does following things —
- Create and control private keys
- Bitcoin network
Ok, I have a wallet, what is next?
You need a Bitcoin address.
What is Bitcoin Address?
- Can be created by any user using wallet
- No cost to create address
- ID comprised of 25–35 characters
- You can share address for transactions
Now you are all set to Buy and Sell Bitcoins. More information on https://bitcoin.org/en/buy
Can I buy Bitcoins locally?
Yes, you can find local sellers on https://localbitcoins.com/
What is Blockchain?
It is a continuously growing list of records, called blocks, which are linked and secured using cryptography. It is the underlying technology of distributed cryptocurrencies like Bitcoin.
It is —
- A distributed database
- Contains balances
- Protected by cryptography
Who invented Bitcoin?
There is not identifiable person but as per Wikipedia Satoshi Nakamoto is the name used by the unknown person or people who designed bitcoin and created its original reference implementation.
So what’s the problem?
It could be risky to invest in something like Bitcoins as What are problems?
- There is no standardisation
- This is not scalable enough
- Infra cost can be too high for mining
In coming days, I am planning to explore more on these ! I will keep you posted. Hope this is helpful ! Thank you for reading !