In this section, you’ll find all articles related to bitcoin where we go through the best exchanges, best wallets and much, much more. Our goal is to help you navigate in the jungle of bitcoin services and products so that you don’t lose money, and can put as much of that money as possible into Bitcoin.First, we will briefly go through what bitcoin actually is for those of you who still feel a bit lost about what it is. After that, you will find all the articles in this section. Click on the article that you think fits you the best, and let’s jump right into it!
What is bitcoin?
The “bitcoin” hype is on the rise. People are rapidly buying into it because of its astronomical gain in value, rising over 2000% in the past year alone. But what exactly is a bitcoin and what makes it so valuable?
Let’s delve a bit deeper with an example – Imagine you are buying something online on an e-commerce website and are asked to pay for your bought item (let’s say, a watch) in fiat currency such as the dollar via a wallet-based or other online payment processing systems. You have two options:
You can either directly pay the merchant with your preferred currency through a Bank transaction or you can transfer that money into your online wallet from your Bank and use that wallet to pay to your merchant in exchange for the product. Now, just remove the middle person i.e. the Bank transaction and the currency with which you are paying.
What are you left with? Just an online electronic payment/transaction system with no value of its own.
This is where the bitcoins, and other cryptocurrencies, – an innovative digital currency – come into play. These are created, distributed, and all transactions with them happen electronically with the usage of a great amount of computing power.
We get physical currency from our government controlled authority or Bank but here, there is no Bank or central governing body (decentralized) to control the production of bitcoins – they are generated by solving mathematical puzzles and complex algorithms! If you download the open source software governing bitcoin, you can also become a part of this protocol i.e one of the nodes in the network.
People believe that the bitcoin is susceptible to stealing or even circulation of fake bitcoins. Keeping this in mind, Satoshi, the speculated founder of Bitcoin, has safety measures in place. Every single purchase or exchange made using bitcoins is recorded digitally and this log/ledger is known as blockchain.
All the people participating in the network have a copy of this ledger on their system thus making it decentralized and immutable. What makes the bitcoin system so secure is that all the nodes of the system have to agree on a transaction before it is added to a block, thus making the entire network transparent.
There is no single authority that controls this system but there are “miners” who process information about the ownership of bitcoins and all the transaction details. They maintain, update and improve the system and in return, get rewarded by bitcoins itself.
The price of bitcoin is highly variable because the market itself is so volatile. Due to this many people are using it for trading benefits. Also, many countries have started to use or are going to initiate usage of bitcoins in replacement of actual currencies.