Every thing you need to know about bitcoin and cryptocurrencies

  • March 7, 2021
whats-bitcoin

Today we can see traces of bitcoin wherever there is a big business contract holding up. Specially from the time of Bitcoin big raise in value, the name is heard from almost everyone who wants to invest.

The interesting part is that everyone has their own unique definition of Bitcoin. Some people call it a big scam project, and some other people recognize it as the phenomenon of the era. Stay with us to learn a fixed definition of Bitcoin.

What is Bitcoin?

Bitcoin is a cryptocurrency, a payment method, a digital money, and a global network. Two important feature of Bitcoin that you need to know is that it is decentralized and non-physical, therefore the transactions through Bitcoin is completed directly between the two main parties.

This definition is a complete way of describing Bitcoin, but you may get confused about some concepts. So, we will go into details to learn it thoroughly.

Bitcoin is a cryptocurrency!

Cryptocurrency or money that is secured using cryptography is a non-physical money that is considered as a digital asset and uses cryptography methods for transferring on the internet. Cryptocurrencies are designed for further security, eliminating the mediums and having unknown identity. You can learn more about cryptocurrencies here!

Bitcoin is a payment method!

Today and with the ever-increasing fame of Bitcoin and other cryptocurrencies, the number of stores that accept Bitcoin is going up. Nowadays, you can pay Bitcoin to buy a sandwich or even a car. Even some universities accept Bitcoin for their expenses. Bitcoin transactions are secure and fast and cost very low. Therefore, such advantages cause its transactions to be more popular among shops around the world.

Bitcoin is decentralized!

Bitcoin is not controlled or even supervised by any individual or organization. There is no central bank to confirm Bitcoin transactions. No one owns Bitcoin. That is why Bitcoin network is called decentralized. If you want to know why it is decentralized, you have to consider the fact that Bitcoin is running on a distributed ledger called blockchain. Blockchain is the most important component of cryptocurrencies and is the main reason why they exist in the first place. Blockchain is also a distributed network meaning that managing and controlling the actions withing the network is distributed among the users. That is why we can say that there is no single person or organization who controls blockchain. If you want to learn cryptocurrencies, you have to understand what is blockchain and how it works. In fact, it can be said that blockchain is a system of registering and reporting information which is decentralized and distributed. The first function of blockchain was seen in Bitcoin and cryptocurrencies. The information that are gathered on blockchain, are actually Bitcoin and other cryptos financial transactions.

Now you can read the definition of Bitcoin, AGAIN!

Bitcoin is a cryptocurrency, a payment method, a digital money, and a global network. Two important feature of Bitcoin that you need to know is that it is decentralized and non-physical, therefore the transactions through Bitcoin is completed directly between the two main parties.

It seems better, right?

Now that you have a good deal of information about Bitcoin, let’s take a look at the history of Bitcoin.

The history of Bitcoin

Since blockchain is the main component of cryptocurrencies and has caused them to exist, I think it is better to check blockchain history first. Blockchain or a chain of blocks was first created and run in 1991 by Stuart Haber and Scot Stornetta. It is a database consisting of chains of blocks that are auto managed and auto controlled and uses distributed ledger. This network, distributed the tasks among all users and eliminated the central management, therefore, its security increased and it became untraceable. This network seemed useless until 2008 when a person or a group of persons introduced the first functional blockchain and then a year later Bitcoin was created.

Bitcoin was created for several reasons:

Decentralization:

It means that no individual or organization is in charge and every one can manage the network! Bitcoin could eliminate all financial mediums like banks. Through internet and with the use of blockchain, the transactions are done directly between the parties. You don’t need to open an account in a bank and no one can control your accounts!

Security:

Bitcoin’s decentralization results in security. Since no individual or organization controls it and meanwhile there is no possibility to hack or change information stored on blockchain because everyone has a copy! Yet efforts have been made to breach into user’s accounts on blockchain like 51% attack, but this is the user’s fault and not the system.

Bitcoins are also stored on blockchain and we can access them through a medium called crypto wallet. You can learn more about crypto wallet here!

Anonymity:

Since Bitcoin network is decentralized, it can not be easily discovered which address has received an amount of Bitcoins. Of course, there are ways to identify the origin and the destination of transactions by Bitcoin in order to prevent money laundering, however, you can use full node wallet to have anonymous and untraceable transactions. You can also register on blockchain with fake information in order to keep your identity hidden and safe!

Advantages of Bitcoin over fiat money

Bitcoin was designed to fill the gaps of fiat money. This is why it has been welcomed by a large number of people and organizations. As you can guess, all Bitcoin features can be considered as its advantages over fiat money.

 

  • It has no center of control!
  • It cannot be forged!
  • It can live longer than fiat money!
  • It has no limitation of use!
  • It has a high value!

Bitcoin Price

Bitcoin price was less than a dollar at the beginning of the road, but it has reached to thousands of dollars at the moment. Bitcoin’s value has seen many ups and downs during the last decade and many factors have caused this fluctuation. Mining rewards, Bitcoin network changes, forks, halving and even new coins offering are the things that affect Bitcoin price. One thing you need to notice is that Bitcoin quantity is limited to 21 million. These Bitcoin are put into the cycle through mining and this has also helped its value to grow. It is estimated that in year 2140, all Bitcoins will be mined and by that time, no one know how much it will worth!

How to forecast Bitcoin Price

If you want to be a trader, you need to forecast Bitcoin’s price in order to know when to buy and when to sell. For this purpose, there are two kinds of analysis which are most used by traders, technical analysis and fundamental analysis.

In technical analysis, the price is foreseen through the price history and the market cap. On the other hand, fundamental analysis focuses on the national economy, industry and companies involved!

How to earn Bitcoin

 

  • Trading: You can easily register in an exchange and buy Bitcoin.
  • Payment Method: You can sell product and receive Bitcoin as its payment method.
  • Mining: you can use your hardware computing power to mine Bitcoin. Although it gets harder every 4 year!

This article is a summary of what Bitcoin is, but every aspect of it can be discussed in a single article. Stay with us for more articles on crypto world, blockchain and how to become a trader.

 

Please leave a comment below if you know anything interesting about Bitcoin or want to know anything interesting about it.