What is bitcoin?
Bitcoin was created in 2008 by an unknown person named Satoshi Nakamoto. Bitcoin was made to eliminate the middle – man, cancel interest fees, and make transactions transparent. It was created as a decentralized system, where you would be able to control your funds.
Bitcoin is a decentralized network of digital currency. Bitcoin is a network of independent computers that generate, propagate, and verity monetary transactions.
A lot of companies use the option to buy their products with bitcoins, but still, it hasn’t yet made its big break. Most people try to get rich by trading it.
With bitcoin, you can buy things anonymously. International payments are cheaper because bitcoin is not part of any country or subject to regulation. Some people buy bitcoins as an investment, hoping that they will go up one day.
How does it work?
Cryptocurrency is an exchange of digital information that allows you to buy or sell goods and services. Transaction gains its security by running on a peer-to-peer computer network that is similar to Skype or BitTorrent, a file-sharing system.
Bitcoin works on a vast public ledger – blockchain, where all confirmed transactions are included in blocks. When each block enters the system, it is broadcast to the peer-to-peer computer network of users for validation. This means that all users are aware of each transaction. It prevents stealing and double-spending.
Bitcoin wallet
In order to store your bitcoins, you need to sign up for a cryptocurrency wallet. Wallets come in five types – desktop, mobile, web, paper, and hardware.
With bitcoin you don’t have any physical trace of your transaction, you only have records of transactions. In order to make a transaction with someone, you need to send them your key – a private sequence of letters and numbers, which contains your source transaction of the coins, and the other person’s wallet address.
The private key is used to sign transactions. The signature also prevents the transaction from being altered by anybody. The transaction confirmation process is called mining.
Bitcoin – different from other currencies
Bitcoin is valuable because there are a lot of people who will exchange them for goods and services. If there are people who want to be a part of the bitcoin “community”, then bitcoin will have value. And if no one will be interested to exchange their bitcoins for goods and services, then that would be it for this cryptocurrency.
The most important thing about bitcoin and why people like it so much is that it is not controlled by banks or the government. People can buy anything anonymously, even if every transaction is recorded, they still can maintain anonymity, because no one knows which account number was yours.
It is safe to make transactions with bitcoin because everything is recorded. It would be very hard to copy or make fake bitcoins. There is a possibility that you can lose your bitcoin wallet or delete it, then it will be lost forever.
Since the year that bitcoin was first created, it has gone up and down, that’s why a lot of people still believe that it is an unstable investment.
Mining – a process that is part of the cryptocurrency
Bitcoin system works if, people tend to make their computer transactions for everybody. Computers can make out difficult sums, sometimes they can be rewarded with a bitcoin, that the owner can keep.
To get a bitcoin, you need to set up a powerful computer. This process is called mining. But there is a minus to it, sums are becoming more difficult to stop more bitcoins from being generated.
Mining is a long process, where you can end up with no bitcoins at all. It is a risk that many choose to pursue.
Bitcoin supplies are finite
It is true, that bitcoin supplies are finite, it is said that there only ever be 21 million bitcoins, and that’s it.
Most people tend to compare bitcoin with gold because they both have some similarities. Bitcoin as gold, cannot be created more than it is available. Resources are limited. When miners unlock 21 million bitcoins, the planet’s supply will be tapped out.
What can you buy with bitcoin?
A lot of people maybe don’t know that actually there are a lot of places where you can buy things with bitcoins. But still, there is a very small circle of services that accept bitcoins.
You can use it to buy things online – Overstock, Etsy, Microsoft, Newegg, and Shopify.
There are some web pages where you can find information about bitcoin spending places. Such as – Where To Spend Bitcoins UK, use bitcoins, Coinmap, and Spendabit.
There are a lot of services that introduce their clients to digital currencies as a new payment method.
Here are services that use digital currencies as a payment method – Dish Network, ExpressVPN, PureVPN, OkCupid, WordPress, Reddit, Namecheap, Bloomberg, Chicago Sun-Times, SuicideGirls, and Treehouse.
Nowadays, every gamer uses an online shop to purchase a video game that he/she wants. Video game online shops are not an exception that uses bitcoins as a payment method.
Here is a list of online shops that uses bitcoin – Xbox, PlayStation Network, Humble Bundle, Big Fish Games, Green Man Gaming, and Zynga.
Travel is a big part of every human’s life, and it is a big industry. Why not use new purchase methods, such as bitcoin? Travel agencies now use an option to pay for your holiday with bitcoins.
A list of travel agencies and airlines that use bitcoins – Expedia, AirBaltic, Webjet, CheapAir, Bitcoin Travel, Travel For Coins, and Virgin Galactic.
If you are a person with a good heart and you like to donate, here is a list of organizations that accept donations with bitcoins – Wikimedia Foundation, Wikileaks, and Bitcoin for Charity List.
