A beginner’s guide to bitcoin
Technology is changing in the world currency with the introduction of bitcoin. Through blockchain technology, bitcoin became the first cryptocurrency ever created. Many people did not understand what it is for a long time. In this guide, we shall look at everything bitcoin.
What is bitcoin?
Bitcoin is simply defined as a digital currency. Also referred to as cryptocurrency, bitcoin is the first of its kind. It is digital because it is not tangible that you can touch it. Normal currency is like notes, coins, and gold that you can touch and see. You cannot touch bitcoin. In fact, bitcoin does not even exist. What is called bitcoin is only proof of transactions that are stored on the blockchain.
Fiat currency is married to a state. A certain country can claim to own a certain currency. USD is for the USA, GBP is for the UK, Rand for South Africa and so on. No state can lay claim on bitcoin. It is us a world currency.
Who created Bitcoin?
This is a question that is still a mystery in the minds of many people. It is not known exactly who created the technology.
However, it is assumed that a person or group of people that go by pseudonym Satoshi Nakamoto is responsible for the currency. Today, his own bitcoins are still untouched as he has remained anonymous.
The aim behind the creation of bitcoin was something totally different. Satoshi wanted to find a way to bring peer-to-peer network functionality into transactions. That goal, become what is now the most impressive technology.
Bitcoin first came into the market in 2008 when Satoshi anonymously published a paper announcing his break-through. But that was not the first time such, an attempt had been made. In the late 90s, many scientists had tried to find a way into a decentralized system to bring blockchain technology into financial functionality without success. When the paper was published, therefore, it was a breakthrough of the century.
What makes bitcoin so special?
Bitcoin is a special currency due to so many factors. It is hard even to imagine the impact bitcoin will have on the financial sector should it be fully adapted. Even now, there are those who are still cautious about it, but it has spread its roots beyond the limit. Creators of bitcoin never anticipated that it could pick up as fast as it has today. Its speed of adoption is one of the characteristics that have set it apart from the traditional fiat currency.
But that is not all. It has other special features that make it worthwhile.
– It is permissionless
When you want to use other currencies or own them, you must get permission from the institutions that own it. That is not the case with bitcoin. You can own digital currency from anywhere in the world, and no one will ask you questions about how you use it.
– It is decentralized
Bitcoin is built on the blockchain. The blockchain is a Distributed Ledger Technology. This means bitcoin has no single point of failure, like other currencies and traditional servers. This characteristic is made possible because each node involved in blockchain mining has the same copy of the ledger. If say, for example, many computers are forced to shut down in a certain country; the others will continue to operate without any loss of data.
Where can I buy bitcoin?
There are many places you can get bitcoin from today. For beginners, you can buy it from many exchanges on the market using fiat currency like RAND,USD.MWK etc. Below are some exchanges:
If you’re in South Africa and other African countries. Use:
If you’re in USA, Canada or UK. Use:
How to Buy Bitcoin with Credit or Debit card or without ID
Exchanges are great but most of them require you to provide personal information like ID, Proof of address etc as a regulatory measure. You can avoid this by buying bitcoin from friends or strangers who has it. You can also buy Bitcoin using credit card, Paypal, Western Union and other methods using: https://paxful.com/?r=zGMkybbRwQW
Being paid with bitcoin after a task is another great way to get them. You can simply ask to be paid in bitcoins instead of fiat currency.
How much do I need to buy bitcoin?
Most people ask this question assuming that they need to buy 1 or 2 or 3…Bitcoins. The truth is BItcoin is highly divisible to 8 decimal places which means you can even buy $1 worth of Bitcoin. You only need to have a certain amount of money transferred through your digital wallet to the exchange you have chosen or in cash. You will get the bitcoins equivalent to that amount.
How do store bitcoin?
When using hard cash, you store it in a physical wallet. Well, bitcoin is not different. Before you buy bitcoin, you are supposed to sign-up for a digital wallet you will use to access your coins. You can either store them on the exchange wallet or get a private wallet. It’s best is to store them in your own wallet for the sake of privacy and security.
Here is a list of wallets i recommend:
MyCelium wallet: https://wallet.mycelium.com/contact.html
Exodus wallet: https://www.exodus.io/
The above wallets are the mostly used and are mostly referred to as “Hot wallets”. This is because, you’re trusting the company the created the wallet to store your coins. Not much different from a bank, however you’re vulnerable to hacks and regulation.
The best wallets are referred to as “Hardware wallets” also known as “Cold wallets”. They are pieces of hardware which are always switched off until you connect them your computer or phone to use them. Hardware wallets provides the highest form of security and privacy. No one knows how much Bitcoin you have except yourself. You can order those via the links below:
**Ledger Hardware Wallet: https://www.ledgerwallet.com/r/c1ec
*Trezor Hardware Wallet: https://shop.trezor.io/product/trezor-model-t
Here is a video on how to set them up or use them: https://youtu.be/kl0uIJS0CUc
There are many types of digital currencies including hardware and software.
How do people make money with bitcoin?
Holding AKA HODL
Most people have made money by price appreciation. They bought early and over time, the price of Bitcoin has gone up significantly. I have interviewed people who bough Bitcoin at $2 or $7 and are now multi millionaires. Listen to my interviews with Peter Saddington or Ray Youssef to hear their story. The strategy of buying and speculating on cryptocurrencies is called “HODL”so if you’re holding some Bitcoin now for future gains, you’re are HODLER.
Like forex, commodities and stock. Cryptocurrencies are traded everyday on a 24/7 market using different exchanges. The best exchange is Binance . You can sign up here https://www.binance.com/?ref=16626703
Other exchanges are:
– Binance: https://www.binance.com/?ref=16626703
– Coinbase: https://www.coinbase.com/join/580beab974462c332874e6f0
– Coindirect: https://www.coindirect.com/?afid=PQYKQV1Q
– Bittrex: https://bittrex.com/
– Luno: https://www.luno.com/invite/UAC8E
– Bitfinex: https://www.bitfinex.com/
The most basic way is to mine bitcoin. Since mining is such a hard task today, people use pool mining and share the profits. Apart from mining, you can also use the following means;
- Work of bitcoin companies
- Work with affiliate programs
- Give your bitcoins to companies that trade
Mining however is complicated. It involves expensive computer equipment, electricity, air conditioning and space. There are companies who own large mining operations and they allow you own a small mining rig within their operation, this is called “Cloud mining”. They pay you based on what your machines make but they deduct fees for hosting your rig. There has been lots of scams who claim to be mining Bitcoin for their users when this was not the case, they were running a pyramid scheme instead. Mining used to be profitable during the early years of Bitcoin when you didn’t require heavy computers to mine because the bitcoin network was so small. Should you consider mining, do your own research.
I personally don’t mine anymore. I have a small amount of money in cloud mining using Bitclub network which you can join here: http://bitclub.network/ninja265
How to sell bitcoin
Selling bitcoin is just like buying it. You can go through exchanges and identify a buyer or simply find one directly yourself from the market.
Why use bitcoin?
Bitcoin is fast becoming popular, and you cannot miss being part of the wave. It is being adopted throughout the world today and may become the only currency in the future.
What is bitcoin mining?
Bitcoin mining is more or less the same as mining gold. Only that bitcoin mining involves solving complex mathematical problems using high power computers. Once a transaction is verified, it is added to the chain and the next block is open for solving. You can mine alone in a pool.
Why is bitcoin so volatile?
That answer to this is simple; its decentralized nature makes it very volatile. Today, the price of bitcoin can be $15k, and tomorrow it is $6k. Why is this so? Consider the following:
– Deflation in the cryptosphere has only started.
– It has not a fundamental price to fall back upon
– Rampant market manipulation
– Institutional investors are avoiding it
– Financial planners no longer recommend it
What can you buy with bitcoin?
You can buy anything in the world using bitcoin. Bitcoin is no longer just a coin to use online; it is finding its way into our daily lives. Many stores are accepting bitcoin today.