Cryptocurrencies were the last things the world might have been expecting, but now, they look like they are here to stay. Bitcoin is one of such and has gotten so popular, many associate the words ‘blockchain’ and ‘cryptocurrency’ with it.
Giving its market capitalization of almost $100 billion, such a popularity is not misplaced.
For many though, bitcoin is just that – bitcoin. In fact, this cryptocurrency is so much more, and we are going to touch as many points on that as possible.
What is Bitcoin?
Developed in 2009, bitcoin started the wave of what we know as cryptocurrencies today. It was the first general in the crypto battle and brought on the world a wave of digital currencies which would go on to disrupt the financial institutions.
Even though the digital currency didn’t pick up in the first couple of years after its inception, it has now taken flight to become a mainstay in our financial economy.
How are bitcoins manufactured?
Bitcoins are created in a series of processes all referred to as ‘mining.’ This is not like physical mining for gold, but a virtual one.
A computer is used to solve complex mathematical problems around a bitcointransaction. When such a problem has been solved, the computer earns bitcoins for all its efforts.
Note that the above is an oversimplification of the process. Mining bitcoin requires some serous hardware and a lot of electricity too. Likewise, you won’t be the only one trying to solve the said mathematical problem.
It boils down to the fastest and most powerful computer (with ample electricity to use) to make headway with the solution. The computer is this rewarded with some number of bitcoins for their efforts.
For those who cannot mine the coins themselves, you can buy from a trusted vendor. You will usually find them on places like Paxful and Coinbase. Always ensure you are careful enough to avoid scams though.
Where are bitcoins stored?
Since they do not exist as hard currencies, bitcoins are not stored in banks, vaults or any other physical storage location. Their fiat nature makes them require special typesof digital storage media called ‘wallets.’
These wallets are like bank accounts, only that they can only hold bitcoin (and other cryptocurrencies too). Some of the most common and highly-trusted wallets are Luno, Paxful, Blockchain.info and Coinbase.
What is bitcoin worth?
The worth of bitcoin, like any other currency, is not a fixed value. Its value is subject to changes in the market trends, news, and other indicators which determine the values of other currencies.
That is why bitcoin was able to rise past the $19,000 mark in December of last year and hovered just above $3,500 in early December 2018.
Depending on where you are in the world, the value of bitcoin will be evaluated against a physical currency (with the USD being the most compared against)
What are bitcoins used for?
A lot of trading happens on bitcoins, so many tend to think they are just there to be bought and sold. They are meant to be used for so much more.
The kind of anonymity that bitcoin provides allows many peopleperformtheir transactions away from the watchful eyes of the government.
Political activities can now acceptdonations and conduct rallies without the fear of having their account seized. Or worse, getting their benefactors arrested.
Bitcoins have also provided an anonymous way of paying for stuff online. This model keeps the identities of political dissidents, journalists, refugees and people on the run, safe. They don’t have to worry about being flagged down just because their name/ aliases came up on a credit card transaction.
Beyond that, bitcoin is now a practical method of paying, replacing normal currencies. Such can be seen at a coffee shop in Prague where only bitcoins are accepted.
Of course, they can also be used as a store of value. Since the price of bitcoin (againstphysical currencies) tends to rise and fall, many see it as a viable investment too.
How can I secure my bitcoins?
Pick a secure password for your wallets, and don’t reveal it to anyone. Ensure you remember your passwords too so that you don’t lose all your bitcoins. That has happened in the past, and we can tell you it never ends well.
It is also advisable that you keep your anonymity intact on the blockchain network by using a VPN when accessing your bitcoins/ using them.You can download a VPN for any of your devices where you are handling your bitcoin transactions from to be on the safer side.
There you have it.
From what the cryptocurrency is to how you can get, store, and even use them. You also get additional points on keeping your coins secure in your wallet. Ready to get involved with the bitcoin chain?