Bitcoin Breakthrough
You may have heard about Bitcoin and wondered what it really was. There is always a lot of news about this digital currency and especially how it rises and falls in price dramatically at times. Well, here we will give you the complete 101 on Bitcoin.
As we already mentioned, Bitcoin is a digital currency. You may think that there are actual coins available, but there are not. These are just fabrications. The original intention of Bitcoin was to send payments anonymously and securely online. This is still true to a certain extent today.
Some countries around the world are scared of Bitcoin. It is a totally decentralized currency not controlled by any governments or centralized banks. Some countries have actually banned Bitcoin.
Bitcoin's major advantage over conventional fiat currencies is that it is not affected by any inflationary or deflationary measures imposed by countries. There is a limited supply of Bitcoin, which increases its value — similar to gold.
The technology behind Bitcoin
Blockchain is the technology behind Bitcoin. This is a public ledger system that adds to a large chain of confirmed transactions where the name blockchain originated. Anyone can see the entire blockchain for Bitcoin since it began in 2009. This is a lot of data and will grow even larger in the future.
With blockchain technology, after verifying a financial transaction, you cannot change it. It creates immutable records. This is excellent for security but not so good if you make a mistake with a Bitcoin transaction. There is no turning back after verification and confirmation.
Thousands of computers (nodes) in the blockchain network for Bitcoin validate it all of the time. This means that it is virtually impossible to hack a blockchain network as you would require more processing power than all of the computers that make up the network.
Where can you get Bitcoins?
You can purchase Bitcoins in your native fiat currency, e.g., US Dollar, using a cryptocurrency exchange such as Coinbase.com. There are fees involved for buying and selling, as you can imagine.
A cryptocurrency wallet stores your purchased Bitcoins. The cryptocurrency exchange will provide you with an online wallet, and there are other forms of Bitcoin wallet such as a desktop wallet, a paper wallet, and a hardware wallet.
The hardware wallet is the most secure because you do not leave it plugged into your computer or mobile device. An online wallet is the least secure because if you can access it online, hackers can so.
Learn how to Trade Bitcoin
We would never recommend that you jump into Bitcoin trading. It would help if you learned everything that you can about it first. A number of the exchanges will provide you with a dummy account where you can practice. These accounts have real-time prices like the real ones, and if you make a mistake, you can learn from them.
It doesn’t matter if you blow all of the pretend money in a demo account. Just get another demo account and try again. But imagine this was real money you were trading with — it would be devastating to lose everything wouldn’t it?
