BTC, bitcoin is one of the most popular cryptocurrencies. In 2021, it was reported that BTC had a market cap of $1 trillion. That’s more than the value of all other digital currencies combined.
We have put together this starter guide to learning more about bitcoin and how it all works.
Introduction to Bitcoin (BTC)
When Did Bitcoin Start?
Bitcoin was created by a person using the alias Satoshi Nakamoto. The date this occurred is unknown. In 2009, the cryptocurrency was introduced via an email sent to a cryptography mailing list. In mid-2010, Nakamoto left the team and, shortly after that, took their own life (believed suicide).
In 2010, Nakamoto mined the first block of bitcoins. This was known as the Genesis Block. It was mined on January 3rd, 2009.
What Is Bitcoin Blockchain?
The blockchain is the backbone of this cryptocurrency. The digital ledger can record information, including financial transactions. It’s decentralized in nature, meaning that no one person or group has control over it.
This technology is what makes BTC secure and transparent. The blockchain containing the record of transactions cannot be altered even by those with access to the system. In essence, it’s a public ledger that you can check whenever you want to verify if any changes have been made or not.
To mine BTC, you must have a computer and the necessary software. In addition, mining uses a lot of electricity, so it’s recommended that you don’t do this unless you have access to cheap rates. The process includes solving complex mathematical problems creating new bitcoins in the system. There is a cap on how much currency can be mined.
How Is Bitcoin Valued?
The market values Bitcoin, which means that you can buy and sell BTC at a price that’s different from what it costs to produce. The value of the cryptocurrency is determined by how much people are willing to pay for it. Since BTC is not regulated, its worth depends on demand and the belief in the currency.
What is The Lightning Network in Bitcoin?
The lightning network is a decentralized system for scaling BTC. This means that it can be used to process micro-payments instantly without touching the blockchain directly. The network does not require you to have a relationship with the other party. In essence, you can send and receive money or data from anyone in the world without having to go through a bank.
How Does The Lightning Network Work?
This system is a layer within BTC built on top of the blockchain. There are no fees when using the lightning network because it doesn’t rely on miners to confirm transactions. In simple terms, you can send and receive money via the lightning network without paying an intermediary.
The system works by using smart contracts, which work in the same way as a contract. The network ensures there is no censorship when broadcasting information across the web. It makes micro-payments much more affordable, and you can use this for sending money in real-time without going to a bank or credit card company.
How Can You Get Lightning Network?
The lighting network is not available to everyone at this time. This new technology uses smart contracts, and BTC users need to opt-in to use it. These features currently work with Android, macOS, and Windows systems. The system will be made available for iOS users in the future.
What Is Bitcoin Wallet?
A Bitcoin Wallet is software that you use for storing digital coins. This wallet does not hold actual coins, but it stores your private and public keys, which must access the BTC stored in another address where you have complete control over security options.
A wallet is safer than keeping your coins on an exchange because the private keys are only accessible to you. If someone else got hold of your keys, they could access your funds, so keep them secret at all times.
How To Get A Bitcoin Wallet?
The first step toward getting a wallet is to have some BTC to store. You can get this by mining or buying coins on an exchange. You can also work for them and use a service like Bitwage to convert your earnings into BTC. Once you have some coins, you need to choose which wallet fits your needs best.
You will need a hardware wallet if you want the most secure way of storing your cryptocurrency long-term. You can also get paper wallets that are inexpensive and require you to only print the keys out on a piece of paper. Mobile wallets for Android and iOS devices also work best if you want immediate access to your coins.
How To Send And Receive BTC Using A Wallet?
There is some setup required to transfer coins. First, you need to create an online or offline wallet and choose a receiving address by clicking on the “Receive” option at the top of your wallet interface. You can then copy this address by clicking it and pressing CTRL + C on a PC or Command + C on Macs. Next, head to wherever you store your coins as an exchange or online wallet. You then paste that address into the sending interface for your chosen service to send funds. Your recipient should get the coins within 10 minutes.
Physical Bitcoin vs. banks
Physical bitcoin is a novelty coin with a redeemable code hidden under a tamper-proof hologram. Despite what certain companies may try to tell you, it has no intrinsic value.
Banknotes have evolved from gold or silver-backed currencies into fiat currency that can be created out of thin air by governments and central banks worldwide. This causes the value of the notes to decrease over time.
The founders of Bitcoin designed it as an electronic payment system that has no central authority, meaning its value cannot be printed out of thin air. It is the first deflationary currency in history, and this means its value increases over time instead of decreasing like fiat currencies.
How To Sell BTC For Fiat Currency?
Trading BTC for fiat is another way to get started with this new technology. You can do this by trading your coins on an exchange just like you did when buying them in the first place. You only need to find someone who wants to buy them from you and trade at the agreed price. The buyer will need to send you the fiat currency and wait for your confirmation.
How Much Is Bitcoin Worth?
This fluctuated daily like any currency.
Why Is Bitcoin Going Up In Value?
Numerous factors have accounted for the rise of bitcoin over the past few years. Mining difficulty increases with more people mining cryptocurrency, which means costs constantly rise to keep up with demand. This makes it harder to earn coins quickly and means the value of each coin must increase to make up for this.
Bitcoin is also becoming more trusted and easier to use as banks and governments worldwide take notice and try to understand the technology behind it. This leads people to invest in bitcoin, which increases its price, driving demand even higher.
Is It Safe To Invest in Bitcoin?
This is a tricky question to answer. You will need to conduct rigorous research and learn about cryptocurrency and blockchain technology before deciding whether or not it is safe to invest in bitcoin.
Some people have made vast fortunes with investments in BTC, while others have lost money over the years due to price crashes. There are great ways to protect yourself, though.
Make sure you store your coins in a wallet and not an exchange. You’re the only individual who can access them instead of leaving them online for hackers to steal.
Be careful about where to buy from and avoid shady companies that may run away with your money or try to scam you somehow. You can do several other things to stay safe with bitcoin, but it is primarily down to common sense.
Using Bitcoin is an exciting experience that can change your life in the long run. Despite what you might have heard or seen online, it is perfectly safe to use, but like all trading it can go up and down. There are many ways to keep your coins safe, buy and sell them legally, trade them for fiat currency, make suitable investments, etc. All you need is adequate time and research to improve your cryptocurrency market knowledge.
- Bitcoin for Beginners
- Cryptocurrency for Beginners
- Ethereum for Beginners
- Buying and Storing Bitcoin: An Introduction
- Crypto Glossary for Beginners