Bitcoin

The bitcoin revolution has made the process of making money and creating wealth easier than ever. The term bitcoin stock is relatively new in the business world. It is unique in nature and in its ability to generate wealth for those who take it seriously. Many bitcoin traders have generated enough wealth that today, they are experiencing money freedom. These coins provide an inexpensive, secure, fast and international money transfer option. The bitcoin revolution started in 2009 through a paper which was published by Satoshi Nakamoto. Bitcoin cash resulted from a free software project which was aimed at overcoming the shortcomings of physical cash. Bit coin since creation has been the best system of online value transfer and it is considered by many as the best internet currency.

Whatever the case, we must say that the bitcoin revolution has created more millionaires than the world can count. We are able to have and use this cryptocurrency today thanks to a combination of an advanced software and modern network technology. The program that holds your bitcoins and allows you to spend them is called bitcoin client. This special program is in possession of a long ledger which is referred to as the blockchain. It is this blockchain that holds every single transaction which is confirmed by the bitcoin network.

What is bitcoin

We often hear newbies asking the question “what is bitcoin?”. This is not strange given that the bitcoin theory is relatively new in the business world. Although new, its efficiency has given it an excellent reputation and popularity. If asked what is a bitcoin, I’ll simply say that a bitcoin is a cryptocurrency. That is, a virtual currency. It is also regarded as a digital payment system. It operates through a peer-to-peer scheme thereby eliminating the middleman and allowing a direct transaction process between users. Bitcoin stands out as the first ever decentralized digital currency since it operates without a single administrator.

Still on answering the question of what is bitcoin, we’ll say that the bitcoin revolution came in to free us from the heavy taxes and currency conversion rates that follow physical money. If you wish to transfer money from one country to another, you’ll obviously need to pay the currency conversion fee, service fee to the bank for securing and carrying out the transaction. A sum of these fees could be moving up to 10% of your total sum to be transferred. This fee is likely to end up in the hands of the middleman. This is to say that the middlemen being the bank and government are mining some good cash from your money transactions. However, this is not the case with our bitcoin digital currency since it is independent of any country and geographical space.

Differences between cryptocurrencies and fiat currencies

Bitcoin is far different from our local fiat currencies (Euro, Dollar, and many others). These local currencies are controlled and regulated by the authorities in their countries of origin. This is not the case with bitcoin as it is not regulated by any country. That is why many people consider bitcoin as an official currency of the internet which is governed by everyone using it. Once you have an internet connection, you are free to own bitcoins.

Bitcoins can be transferred all over the world in a few simple steps at a low cost. Another astonishing fact about bitcoin is that all its transactions are anonymous. This is to say that only the sender and the receiver are aware of who is involved in the transaction. Truth be told, the world is gradually welcoming the idea of bitcoin. In some places, you can purchase a hamburger as well as carry out major business transactions with bitcoins.

How does bitcoin work

We will like to complement the answer brought to the question on what is a bitcoin by answering that on how does bitcoin work. Although many people have heard the name bitcoin, they do not know how it works. Before we actually start answering the question, it should be noted that having to master all about bitcoins from just one lecture is not that easy. Although the process is a little challenging, it is not impossible. That is why we hereby write this article in order to take you across most of the important things that you ought to know about bitcoins. Now, let us bring elements of answers on how does bitcoin works. When dealing with bitcoin cash, a transaction can be perceived as either sending or receiving bitcoins.

That is, with your bitcoin wallet, you can either send or receive bitcoins. When setting your bitcoin wallet for the first time, you’ll be asked to set up a unique private key which is also referred to as a seed. This private key is what actually outstands bitcoin in terms of security. You’ll need this private key for future transactions. That is why it is recommended to write down the key and keep it away from the reach of others. Always remember that your private key is not to be shared with anyone neither is it to be written online. Still on how does bitcoin works, we’ll say that bitcoin miners use special software to resolve complex and sophisticated mathematical problems and each time that a positive result is obtained, they are compensated with a certain number of bitcoins.

History of bitcoin

It was on the 18^th of August 2008 that the domain name bitcoin.org was registered. This was the beginning of what we have today in the name of bitcoin cash. However, it was not until the 31^st of October 2008 that the idea of a virtual currency in the name of bitcoin was released to the general public by Satoshi Nakamoto in his paper titled “Bitcoin: A peer-to-peer Electronic Cash System”.  This paper was posted to a cryptography mailing list. This paper explained in details a method of using a peer-to-peer network to generate a system of transactions without relying on any trust.

However, it was actually on the 3^rd of January 2009 that the bitcoin network came into full existence with Satoshi Nakamoto mining the block number zero which rewarded him with up to 50 bit coins. After this, people began developing interest in the network system. Today, the word bitcoin is almost heard from the lips of everyone around the world.  This digital currency was created as a digital asset and designed to work efficiently as a medium of exchange. It uses cryptography to fully control its creation and management. Since its origin up to date, it has always displayed a positive future for its users.

Importance of bitcoin news

Given that bitcoin is highly volatile in nature, it is recommended that every bitcoin user should regularly checkout for recent bitcoin news. By volatility, we mean that the bitcoin value is not constant. It changes on regular basis based on factors which are independent of the user. That’s why you can have the price of bitcoin today different from that of tomorrow. Bitcoin’s volatility nature makes it a risky investment. That’s why it is always advised that anyone who wants to get involved in bitcoin stock or become a bitcoin trader should start by learning how bitcoins operate. And bitcoin news will greatly assist you in better understanding how the network system operates.

Differences between the cryptocurrency and the traditional currency

Depending on both trading parties, everything that a traditional currency can pay for, can also be paid for electronically through bitcoins. Unlike traditional currencies (dollars, euros, and many more), cryptocurrencies are far better in many ways as observed below:

Decentralization

Bitcoin is fully decentralized. There exists no institution that controls this network system. It basically operates on an open network of dedicated computers which are spread around the world. It is maintained by a group of volunteer coders. Its ability to keep transactions anonymous makes it the best choice for people who do not appreciate the control that the bank and governmental institutions have over their money.

Limited supply

Traditional or fiat currencies have an unlimited supply. This is to say that a central bank can send out as much as they want. They can also manipulate the value of a currency over others. In this same direction, holders of such currencies have no other choice than to bear the cost. However, this is not the case with bitcoins as its supply is tightly controlled by sophisticated underlying algorithms. The network system operates by releasing a small number of coins every hour in a diminishing manner.

By diminishing manner, we mean that there exist only 21 million bitcoins. And when all these 21 million bitcoins would have been mined, this fix number will exist in the whole world. By then, the demand for bitcoins will be very high yet its supply will remain the same. And we all know that when demand increases and supply remains constant, the value will likely increase.

Divisibility

It is challenging if not impossible to use traditional currencies in carrying out microtransactions. This is because it is very difficult to handle small units of traditional currencies talk less of even finding them. However, this is not the case with bitcoin whose smallest unit is satoshi. A satoshi is one hundred millionth of a bitcoin (0.0000001). This roughly makes up for one hundredth of a cent.

Pseudonymity

Many people will agree that there are lots of complications that come with using the traditional currency. For a traditional electronic payment to be made, its sender and receiver must be identified by the middleman. This identification process serves for legal verifications of anti-money laundering. However, this is not the case with bitcoins as users do not need to identify themselves before a transaction is made. That is why in theory we say that users of bitcoin operate in semi-anonymity.

Whenever a sending transaction is launched, the protocol checks if the sender has the necessary amount of bitcoins to be sent as well as the right to send them. Once this is done, the protocol proceeds to check if the receiver’s address is a valid one. When this is done, the protocol initiates the transaction without requesting for the users names or personal information. Here, each user is simply identified by their wallet’s address. But it should be noted that the law enforcement has developed methods to identify users should in case there is need to do so.

Immutability

Unlike traditional currency transactions which are mutable, digital currency transactions are not. This is simply because there is no middleman to request the cancellation or adjustment of any transaction. While a few people might find this point too hard to bear, others will welcome it since it signifies that transactions cannot be manipulated or tempered with.

Fast and global

Bitcoin transactions are instantly propagated into the network system where they are validated in few minutes. Since they operate through computer networks, distance is not really an obstacle. You can easily send money to someone in the other side of the planet. Since creation, it has proven to be fast and reliable. This is hardly the case with traditional currencies.

Top security

The security around digital currencies is a remarkable and outstanding one. All bitcoin funds are locked into a public key known as the cryptography system. It is made in such a way that only the owner of the private key is offered the right to send cryptocurrency. Its use of a strong cryptography and big number combination makes the system impossible to break.  If you know how the Fort Knox is strong then you’ll better understand what it means by the saying that a bitcoin address is more secure than the Fort Knox.

How does bitcoin code operate?

This system is one that has both the manual and the automated modes. Haven said this, if you happen to be a bitcoin investor with the ability to mine bitcoins all alone, you are free to implement your personal strategies in order to make more bitcoin cash. With the bitcoin code, you do not really have to stress up yourself thanks to the software’s autopilot feature and its sophisticated algorithm. You just simply need to rely on the software to receive your returns.

Where can I find bitcoins?

There are several ways on how to get bitcoins. Just as much as you can learn how to buy bitcoins, you can also learn how to get free bitcoins through bitcoin mining.

Cryptocurrency exchange agency

A cryptocurrency exchange agency is where you can easily exchange your regular coins for bitcoin cash. You can as well exchange your regular cash for satoshis which represent a smaller unit for bitcoins. In Canada and the United States, the best cryptocurrency agency that takes into consideration the daily bitcoin value is Coinsquare. In the United Kingdom, the best cryptocurrency exchange agency that suits bitcoin traders and those wanting to get involved in bitcoin stock is the BitBargain.

Bitcoin ATM

These are places where you have the ability to exchange bitcoins or regular cash for another cryptocurrency. Thus, you are always free to turn your coin cash into any other currency of your choice.

Selling products or services

This is another pretty nice way which you can use to get these cryptocurrencies. It is very simple since you just need to step out with anything of yours for sale. Here, you have to create a coin wallet through which you’ll receive your payment.

Classified service

It is also very possible to find a seller who will help you in trading bit coins for cash. This is another pretty simple way on how to get bitcoins.

What is bitcoin mining?

Bitcoin mining is the act of keeping the bitcoin process secured. This is done by chronologically adding new transactions or blocks to the chain while maintaining them in the queue. As a transaction is finalized, codes coded, bitcoin passed, the block is chopped off. If you want to get free bitcoins, you can easily do this by becoming a miner. The btc price today has become so interesting that many people are looking for ways on how to mine bitcoins. This has eventually rendered the process of obtaining free bitcoins a little challenging but not impossible. When we move 3 years backward, we realize that the value of 1 bitcoin was not as high as that of today. This shows that the btc price has actually gained a remarkable increase which makies it a currency worth having.

By becoming a bitcoin miner, you can generate new bitcoins by simply using a special software to resolve sophisticated mathematical problems. These issues are also well known as cryptographic problems. The mining reward is agreed upon by everyone in the network. You can mine alone or join a mining group. Given that almost everyone is getting interested in mining bitcoins, the process has become a little tough for a single person. That is why people are now creating groups and purchasing more powerful mining software for the task. If they successfully mine 1 bitcoin, it is shared among everyone. 

Tips on how to protect your coins

These digital currencies are safely kept in what we call bitcoin wallets. These wallets could be treated just as your normal wallets. You have to take necessary precautions to keep them away from the reach of others. In order to protect your bitcoin wallet from thieves, it is recommended that you back it up on a regular basis. Also remember to encrypt your smartphone or wallet with a strong sophisticated pass word.  For an added security, it is recommended that you store up some of your bitcoins in an offline wallet that is not connected to your network. See this as a bank which holds the major part of your money while only a little is kept in your wallet to meet up with daily cash demands.

It is highly advisable that you regularly update your software and make sure that you are using the latest uncompromised version. For a more sophisticated protection, make use of the Bitcoin’s multi-signature feature. This feature makes the approval of each transaction dependent on multiple independent approvals. Although bitcoin is an anonymous way of carrying out your online money transactions, you must remember that being a public transaction platform makes it easy for others to see your balances and log of transactions. If you really want to be on the safe side, always change your bitcoin wallet address after every transaction. In addition, you will be doing well to use multiple bitcoin wallets for different purposes. This will keep you on the safe side.

Buy domain and hosting with bitcoin

Today, it is very possible to buy domain and hosting with bitcoin. Although some web hosting companies are still reluctant to welcome the idea of receiving payment in the form of bitcoins, Web4Africa actually offers to possibility for an internet user to buy domain and hosting with bitcoin from them.

What are the disadvantages of bitcoins?

Unfortunately, Satoshi Nakamoto who is regarded as the founder of bitcoin has never been seen. This might be a justification to those that think he was not the one who founded bitcoin. However, if we are unable to easily spot out its founder, this can only allow us in a wondering mood. Whatever be the case, we must say that bitcoins are surrounded by daily hacking and scamming activities. Its volatility nature leads to different fluctuating bitcoin prices every day. You’ll hardly find that the bitcoin price today will remain the same tomorrow. This volatile nature actually makes it a risky activity.

This is the main reason why so many people prefer to stay away from it. In addition, the complexity of the mining process is one of the discouraging factors that sends many away. We must also add that bitcoin transactions often turn to be slow. You might find yourself waiting for a couple of minutes before receiving a confirmation message about your transaction. It is during this waiting time that your network approves the transaction. A few digital currency users have reported to have waited for over an hour before receiving a confirmation message concerning their transaction. This waiting process is a discouraging one.

The four major bitcoin scams

Just as we previously mentioned, bitcoin is surrounded by lots of scams that are waiting like hungry lions to devour your wealth. This calls for a greater attention when dealing with bitcoins. The following are bitcoin scams which you should stay away from.   

Ponzi scams

The Ponzi scams are also known as high-yield investment programs. They have ruined more men around the world than we can count. Coming with higher interest rates than the normal prevailing market rates, the Ponzi schemes will end up forwarding your hard earned cash to the thief’s golden wallet. They mask and popup with different names in other to protect their identities. The Ponzi scams are more of a get rich overnight stuff that will leave you crying and grinding your teeth. The whole truth is that their offers are always too yielding to avoid but you must stay away from them. Also stay away from companies that demand your bitcoin wallet address for payment. Legit companies use payment processors such as Coinbase and BitPay.

Bitcoin wallet scams

Did you know that bitcoin scam wallets are similar to online wallets? Such are designed to make a way with your bitcoin cash. The address leads to the thieves. And the day that they find the amount interesting, that will be the end of the wallet.

Bitcoin mining scams

This is an offer which comes from companies who promise to fill your wallet with bitcoins if you invest in their mining process. They usually propose very high profit rates and the moment you give your money to them in the name of investment, that’s the end.

Bitcoin exchange scams

Bitcoin exchange scams are those that offer features that the typical bitcoin wallet does not offer. Such offers are often PayPal/Credit Card processing as well as better exchange rates. Always remember that not all that glitter is gold. It’s a big trap laid down to catch your wealth.