If you’ve already heard of Bitcoin you might’ve definitely wondered, “What is Bitcoin?” And even if you understood that it’s just a virtual currency, it’s still a confusing mystery.
Even though there are many explanations as to how Bitcoins work, it’s not totally clear for everybody. So, here are few things you need to know about Bitcoin.
Bitcoin was launched in 2009 by Satoshi Nakamoto, an alias used by an unknown person or a group. It uses cryptography, so that the safety of the transaction isn’t compromised. When virtual currencies use cryptography to secure the transactions or to work as a medium of exchange, they’re called Cryptocurrency. Bitcoin was the first of that kind.
Many cryptocurrencies came into existence after Bitcoin. They’re grouped together under an umbrella term, ‘Altcoin’. Altcoin is just the blend of the words ‘Alternative’ and ‘Coin’, where Coin represents currency or more specifically, Bitcoin. These claim to be a better alternative to the Bitcoin, by rectifying the flaws that it had.
Bitcoin (abbreviated as BTC) is not governed by a Central Authority. It is decentralized digital cash system, where everything happens based on peer-to-peer electronic transaction and usage. Meaning, two people can transact without any third-party interference.
All the Bitcoin transactions around the world are recorded on an open ledger/account. The online open ledger is called a Blockchain.
If it’s open, can people see what exactly I am buying with Bitcoin?
No. Blockchain is cryptographically secure, where a user gets access with a private key and public key. When a said user transacts, all one can see is the amount of transaction and the address of the user, which is generally 26-36 alphanumeric characters. No one can see the real identity behind the transactions, except the one who’s transacting.
Blockchain is powered by users’ computing power and doesn’t have any one central server system. When a user volunteers to use their computing power to maintain these Blockchains, they’re called Miners. A Miner, because they have to verify and approve a transaction, for it to proceed further. They verify the transaction’s authenticity and update the Blockchain by adding a block, by solving complex math problems.
But, what do these ‘volunteers’ or Miners get doing what they do? After solving, they are rewarded with a set amount of Bitcoins, for their contribution towards maintaining the Bitcoin ledger and security. Miners get rewarded with the freshly minted Bitcoins that are created out of nowhere, which is exactly how Bitcoins come into circulation. Meaning, when miners keep solving the complex problems they get Bitcoins as the prize. Additionally, they get transaction fees, too. As the miners keep mining, the Bitcoins will be created as the ‘treasure’ miners would get. These Bitcoins then circulate in the virtual world, when they transact. To minimize or control the problem of inflation, the Bitcoins will be stopped from being created after 21 million Bitcoins are mined. A miner with powerful computer will be able to solve more problems quickly than the miner with a slower computer.
The Miners’ reward for adding a block will be halved every 2, 10,000 blocks, i.e. approximately every four years. The reward will decrease and eventually reach zero and the 21 million Bitcoins limit will be achieved, which is estimated to happen around the year 2140. There’s a speculation that, if sufficient users agree, they might change the limit from 21 million to 21 trillion Bitcoins. Let’s see what happens about that.
All that’s awesome! But, how exactly can I buy Bitcoin?
Well, you can get these from places called ‘Bitcoin Exchange’, where you can give your country currency (Rupees, Dollars) and buy Bitcoins or do Bitcoin trading in general. The easier way to go about it is to become a BTC Miner and get rewarded in Bitcoins, but this is a very slow process and you would have to have the required hardware for it to work efficiently.
When you buy BTC, in any way you choose, you can store them on your Bitcoin Wallet online. They work just like e-Wallets and store your BTC virtually.
Two more questions might pop up in your head: Who uses Bitcoin? And what can I buy with Bitcoin?
There are many people using it right now. There are major brands accepting BTC as a payable method/currency.
As to what you can buy with it, you’d be surprised to find out the list of things that you can get with this cryptocurrency. I won’t list all of them, but these are a few: Pizza, Beer, and an Apartment! You didn’t see that coming, right?
Generally, ‘Bitcoin investment’ is a preferred act than actually spending it, mostly because of the evident and steady rise in the Bitcoin value in the market.
Coming to ‘where to buy Bitcoin’, you can buy Bitcoin online.
There are Bitcoin trading sites, where you can buy sell Bitcoin. Few of them are listed here:
1.Zebpay: An online trading platform for BTC. They have their own Mobile App.
Image Source: https://www.zebpay.com
-You’ll need PAN card, Aadhaar Card, and Bank account details to sign up and verify your account.
-You can make payment to the Zebpay account to proceed further in your BTC trading.
-They claim that you can buy Bitcoins instantly with as low amount as 1000 rupees.
Go to their website to learn more and start trading in your new found currency: https://www.zebpay.com
2.Coinsecure: Another platform for BTC trading. They have an app as well.
-Coinsecure has a similar process to setup an account.
-You can watch their own tutorial videos to learn more about how to do basic navigation on the website.
Go to Coinsecure here: https://coinsecure.in/
3.Unocoin: Their website has a smooth interface. Also, available on Android and iOS apps.
-The process to sign up and start trading is simple.
-It has free sign up.
-It has calculator to calculate the conversion rate, transaction fee, and tax, for buying and selling Bitcoins.
Visit Unocoin here: https://www.unocoin.com
You can visit Bitcoin’s website to see all the exchanges in your country:
Go to the Bitcoin website here: https://www.bitcoin.com/buy-bitcoin
Bitcoin reached new heights when the value of 1 BTC to USD became US$ 10,000.
Meaning, a single bitcoin was worth 10,000 US dollars. It was reported that many Bitcoin users were relieved after this historic record, as this brought slight positive attention to BTC. Many people were critics in the beginning and till a year ago and they were totally rejecting the idea to invest in Bitcoin. But, this increase of value each day is drawing positive feedback or at least re-thinking of their doubts about the cryptocurrencies as a whole.
It’s highly recommended to be wary of the risks of investing or trading BTC.
Bitcoin marketplace is as risky as any other marketplaces for the government approved currencies.
They also recommend keeping your cryptocurrency in your personal Wallet rather than leaving them at the Exchanges, as many lost their earnings due to a problem that brought down the Mt. Gox, which was once a leading BTC Exchange, situated in Japan.
I’ll leave you with this: please read and re-read and learn as much as possible before you start investing heavy amounts of your money.