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All you need to know about Bitcoin:
Bitcoin is one of the first cryptocurrencies and a worldwide mode of payment. It was discovered by an unknown group or person named Satoshi Nakamoto. But before we jump to know about Bitcoin, we need to know the real meaning of cryptocurrency.
What is a cryptocurrency?
A cryptocurrency is a digital asset which has been designed to work as a mode of payment around the world using cryptography. This is used to protect all transactions, authenticate the transfer of assets and making of an additional unit.
It is a kind of digital currency, virtual currency, and most alternative currencies. This type of money uses decentralize control, unlike the other electronic money or banking system that use centralized ways. Each cryptocurrency is used through a method called Blockchain.
It is a public transaction database that functions like a distributed ledger. Since Bitcoin, 1,800 cryptocurrencies have been made around the world.
• It does not need any kind of central authority.
• It keeps an outline of cryptocurrency units and the ownership.
• It defines the discovery of new cryptocurrencies, whether they can be created or not.
- Bitcoins are an exclusive type of cryptocurrency that is created through a process called “Mining” (no central authority involved).
- It is produced via computers using free software.
- It is limited in supply, unlike the Euros and Dollars that are unlimited.
- Bitcoin is tightly under control by its underlying algorithm.
- It works on a semi-anonymous basis which does not exist in the traditional currencies.
- This is because there is no central authority while using cryptocurrency.
- It only verifies the sender’s previous transactions to confirm that the user has necessary authority and bitcoins to send them.
The transactions of Bitcoins cannot be reversed, unlike the traditional ones.
- This is because there is no existence of a central system that can approve the reverse action.
- This may alarm some users but it also means the transaction cannot be tampered with.
- If the transaction is recorded in the network, and an hour or more has passed, it cannot be modified in any way.
How to buy Bitcoins?
One can buy Bitcoins through exchanges or directly from people in different marketplaces. The buyer can pay for Bitcoin from hard cash, wire transfers, debit or credit card or even other cryptocurrencies. All of it depends on who the person is buying from and where he/she lives.
A person needs to create a wallet where they can store their bitcoin. This wallet could be an online one or desktop wallet or offline wallet with a strong key (password). There is a wide range of services from which one can choose from so an in-depth research would be advisable.
If you’re buying online, then you need to open an account at an exchange. The cryptocurrency exchanges shall buy and sell bitcoins on your behalf.
There are over a hundred exchange services open currently, with different degrees of security and liquidity. The new ones keep emerging while others close down.
In terms of US Dollar volume, Bitfinex is one of the largest bitcoin exchange in the world (mostly designed for spot traders). Others are Bitstamp, Coinbase, and Poloniex for small amounts. Buying on cash has different platforms like LocalBitcoins, LibertyX, WallofCoins, Bitquick, and Paxful.
Coinatmradar is one platform that can help a person find you a Bitcoin ATM.
Bitcoin- Pros and Cons:
It is digital and hence cannot be reversed or counterfeited arbitrarily by senders.
There is a reduced possibility of theft.
There are no transaction fees apply.
Bitcoins are volatile in nature and hence risky.
There is no 100% security despite passwords. Human errors are bound to happen; technical glitches or fiduciary fraud can take place.
There is a lack of application.