Information to Get You Up and Running
Bitcoin represent a digital currency that is stored and controlled by computers across the globe. This payment system exists only on the Internet, which eliminates the need for carrying cash around. It's a way of making payments for purchases just like PayPal and other payment systems. You can spend Bitcoin to purchase items from vendors who support the system.
Why Do Bitcoins Have Value?
You might be wondering why the craze for Bitcoin is becoming more and more intense. The truth is it's a new system that has evolved into something most people want. Bitcoin are also limited in supply, making the demand high.
The original idea was to create a digital currency whose value couldn't be watered down by a central organization or the government.
The Bitcoin Wallet
This is the place where you keep your Bitcoins. The wallet has two parts: the address and the private key. The address is what identifies you. It is a long string of letters and numbers that other Bitcoin users will identify you with. This is all the identification you will need; you don’t have to use any personal information when transacting using Bitcoin.
The address and the key are stored on your computer or your smartphone and allow you to spend Bitcoins during transactions or receive what you have purchased. Because the wallet has a private key, you are the only person who can access your wallet and spend the Bitcoins.
Protecting Your Bitcoin Wallet
This wallet is on your computer or your smartphone. Make sure you have a copy of the wallet, which comes in the form of a .dat file stored on a thumb drive. This is for the simple reason that if your phone gets lost of your computer crashes you stand to lose your Bitcoins. When this happens, you won’t have an opportunity to transfer them to another user on the network or to use them – they disappear forever. So, make a copy and store the backup in a safe place.
Every Bitcoin wallet in existence is tracked by a system called the Bitcoin Blockchain. The Blockchain also tracks any transaction you have ever made using your wallet. This prevents you from making any transaction unless your wallet has enough Bitcoins. Everyone on the network can see your balance and know whether you can fulfill the requirements of a certain transaction or not. This makes it the most transparent currency system in existence that you can use.
You might be wondering how you get Bitcoins when there isn’t a central agency to provide them. Well, this currency is generated by a process called mining. It makes use of advanced computer software specifically designed for advanced mathematical operations.
The mining software automatically rewards a miner with a certain number of Bitcoins after every ten minutes. Mining not only provides a way for you to mint new Bitcoins, but also makes it difficult for hackers to disrupt this network. This creates a secure network that you can use without worrying about intrusion.
You can use the wallet installed on the computer, the phone or use one that is web-based. With the wallets, you can send or receive more Bitcoins from other users via the internet. You can use the Bitcoins for various daily purchases. For instance, you can buy a pizza with Bitcoins or even donate to charity. The only requirement is that the person receiving the Bitcoins must have a system in place to use or trade them.
The good news is the number of merchants who are receiving Bitcoins currently is growing each passing day.
Why Consider Bitcoins?
Bitcoins come with several advantages that make it one of the innovative currencies available. This gives you several advantages as a user:
• You can send or receive limitless payments instantly at any time regardless of where you are around the world.
• You don’t have to pay any processing fee, or the transaction will cost you a very small fee as compared to other payment systems.
• Paying with Bitcoins is irreversible. This protects you as a seller from chargebacks that happen with other forms of payments.
• You can pay for items without displaying your personal information.
So apart from having a way to purchase items securely, you can also spend less on transactions in terms of fees.
How Can You get Some?
Apart from mining, which is a bit complicated, you can buy Bitcoins from private individuals. You can also buy from a Bitcoin exchange.
The creator of Bitcoin is said to be Satoshi Nakamoto (a presumed pseudonym) and he, she or they supposedly own 1 million bitcoins.
Bitcoins represent an alternative currency that is also traded, and its value is dictated by trade. The system isn’t held up or diminished by the action of a bank or government, but rather by the actions of the users on its network.