Bitcoin for beginners
Simply, bitcoin is a decentralized digital currency like virtual cash or gold which is transferred from person-to-person (no bank or government prerequisites or control). The symbol for bitcoin looks like B with little hash i.e. ฿ or BTC (like USD for US dollar). Bitcoin is a crypto-currency and crypto-currencies has been used around since the 1980’s. And the first Bitcoin was actually issued in 2009 by someone apparently named Satoshi Nakamoto and this is believed to be a pin name as nobody knows who started bitcoin first. There were actually only ever 21 million bitcoins in circulation. And in 2009, we had the first bitcoin released and there was a predetermined miles of bitcoin released every 10minutes.
Bitcoin is divisible down to the 8th decimal place .00000001 (USD = .01) , so we can almost break down the bitcoin to a very small amount. Since, there is no central location the way bitcoin networks operate is very difficult and expensive to hack. It is basically controlled by the consensus of market participants. Out of the 7 plus billion people living on the planet, about 6.5 billion people don’t have access to basic financial and banking services like checking accounts or credit card and in US alone it is estimated that about 18 percent people don’t have access to this basic financial and banking services and bitcoin makes it very easy for anybody without government permission or control to have access to virtual banking. Cross-currency purchases and transfers in a cross country border are expensive and have a lot of friction so, if we want to move millions of dollars that cost a lot of money where bitcoin is very inexpensive as we can move millions of dollars within just a second.
Let’s take an example to understand how bitcoin actually works- let’s say somebody gives you cash and you take that money to a bank to deposit into a bank account. In the same way, if somebody gives you a bitcoin, they are stored in a public ledger and everybody has access to this ledger from the very beginning in 2009. Every transaction is actually recorded in this ledger. And Sending/ Receiving every bitcoin is as easy as sending an email. Here, the coins are actually stored in “wallets” like local hard drive wallet in your computer, paper wallet and hosted online.
There is actually two parts of a Bitcoin in your Bitcoin account i.e. Public key (like your account number / email address) which is actually made up of 27–34 alphanumeric characters and another one is a private key which is like your password to use an online banking service. The private key is the password which you need to access your bitcoins in the account.
Talking about the ways to acquire bitcoins, we can buy bitcoin from a person or we can exchange using a website like coin base which actually works like the stock market. We can basically provide a product or service in exchange for bitcoins. Bitcoin is highly volatile, the price is highly speculative and the cryptocurrency market is largely unregulated. If you are looking to invest in Bitcoin then you must go in at your own risk and be prepared to lose all your investments. The main benefit of using bitcoins to transact is that it can be transferred anywhere around the world and be withdrawn from any exchange no matter where you are.
