You want to know what is Bitcoin but are you struggling? This guide is for you to learn what is necessary.
So let's go straight to the article.
Table of Contents
What is Bitcoin?
The Bitcoin is an online financial network, used for shopping among its users. It is very similar to the ones to date"conventionally» payment networks such as credit cards or Paypal.
But Bitcoin differs from these and other payment methods for two very important reasons: First, it is decentralized. The Visa credit card networks and Paypal are owned by for-profit companies, and are run to benefit shareholders.
The Bitcoin Network it belongs to no one and is not controlled by anyone. It has a peer-to-peer structure, with hundreds of computers working together to process Bitcoin transactions. Its decentralized architecture means it is the world's first completely open financial network.
To create a new financial service in the conventional US banking system, one has to work with an existing bank and comply with a variety of complex rules. The Bitcoin network does not have such restrictions. People do not need anyone's permission or help to set up new Bitcoin-based financial services.
Second, Bitcoin it is unique because it has its own currencya. Transactions via Paypal or Visa cards are made in conventional currencies such as US dollars. The Bitcoin network, however, transacts in a new currency, also called Bitcoin.
Who created Bitcoin?
Nobody knows for sure. The coin was created by someone who says it is called “Satoshi Nakamoto", without giving more information about his identity. He has collaborated with other proponents of the Bitcoin concept through online forums, but the members of this community have never met in person.
In 2010 he slowly began to "reduce" his participation in the development of the currency and the last known communication he had was in 2011.
If he ever shows up, he will be a very rich man. He owns hundreds of thousands of Bitcoins and at today's prices, that means he is a… multimillionaire!
Before leaving, Nakamoto passed the baton to Gavin Andressen, who is now considered the head of the project.
Where do bitcoins come from?
In a conventional financial system, new money is created by a central bank. The Bitcoin Network it has no central bank thus, the system needs an alternative mechanism for introducing currency into circulation.
The designers of Bitcoin solved this problem in a clever way. Hundreds of computers scattered across the Internet work together to process Bitcoin transactions. These computers are calledminers” and the process of clearing Bitcoin transactions “mining”. It was named so because about every 10 minutes, a "miner" wins a computational race and receives a prize of 25 bitcoins, worth about $12.500. This award provides a strong incentive for more and more to join the Bitcoin clearing transaction process, helping the currency remain decentralized.
This award is halved every four years. If one does the mathematical calculations one will see that there will be no more than 21 million bitcoins in circulation.
How to get bitcoins?
The best option for a beginner is to buy digital currency through ιon exchange pages, which allow you to buy bitcoins with conventional currencies from other users.
ΤDo I do them after I get them?
Bitcoins are stored in “wallets", which are nothing more than files that have encryption keys, or secret codes, that allow them to be transferred. You can use one of the Bitcoin programs available for Mac, PC and Android.
Another option is to list them on websites known as "online wallets". And another option is the "paper wallets", where you print the encryption keys and keep them in a safe place, like a box.
Each one has its risks. The Bitcoin market is largely out of control and there is little legal protection if you choose the wrong "online wallet service".
The next step is the… purchase.
There are many "bitcoin" traders on the internet who sell almost everything: from jewelry to electronic devices and. Illegal substances.
Can bitcoins replace conventional money?
It is a possibility although people want to use the currency that most people use, and right now for example in the US, this is the dollar.
LIABILITY DISCLAIMER:
Cryptocurrency trading is VERY risky. Make sure you understand these risks if you are a beginner. The Information in the post is my OPINION and not financial advice. You are responsible for what you do with your money
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