What actually is Bitcoin?
Bitcoin is a digital currency that operates on a decentralised network.
Every Bitcoin transaction is recorded in a public log and users can remain anonymous in the network with encrypted keys. Transactions can be made with no middlemen – meaning there is no need to go through a bank.
There is no government, financial institution or central authority that owns the decentralised Bitcoin system.This means there is no need for account numbers, names or any other identifying features that connects Bitcoins to its owners.
People can buy or sell anything without it being traced back to them.
The market of cryptocurrencies is highly unpredictable. The first time when a transaction was done was to pay for pizzas in exchange for 10,000 bitcoins. At that time, bitcoin’s value was negligible, but in today’s time, it is attaining a peak. Even the experts can’t predict the price of it. The cost of bitcoin depends on various factors, but the most important one is investors’ trust.
History of Bitcoin
Bitcoin was the first established cryptocurrency—a digital asset that is secured with cryptography and can be exchanged like currency. Other versions of cryptocurrency had been launched but never fully developed when Bitcoin became available to the public in 2009. The anonymous Satoshi Nakamoto—possibly an individual or a group whose real identity is still unknown—is behind the development of Bitcoin who stated the goal of the technology was to create a new electronic cash system that was completely decentralized with no server or central authority. In 2010, someone decided to sell their Bitcoins for the first time to purchase two pizzas for 10,000 Bitcoins. I hope the pizza was good, because if that person would have held onto those Bitcoins, they would be worth more than $100 million today. In 2011, Nakamoto shared the source code and domains with the Bitcoin community and hasn’t been heard from again.
How to Get Started with Bitcoin?
First, we show you how to create or buy a secure Bitcoin wallet. Then we will help you buy your first bitcoin. Thereafter we will explain how to protect and store your bitcoin.
The final step is to send and receive bitcoin, so you learn how to use the cryptocurrency. We will help you all the way to avoid common beginner mistakes.
It’s easier than many think with Bitcoin. But since it’s about your money it can feel safe with guidance. Here are four steps to start using Bitcoin today:
Step 1: Create a Bitcoin Wallet
Step 2: Get Your First Bitcoin
Step 3: Secure Your Bitcoins
Step 4: Send and Receive Bitcoin
As you can see, getting started with Bitcoin is easy! In the following sections, we will go through all the steps in detail. We end with important about safety along with some tips and advice.
1.Download a bitcoin wallet
A Bitcoin wallet is an app or program that allows you send and receive BCH. Wallets also keep track of your BTC balance which is held in one or more bitcoin addresses. Generally, wallets also have a feature that keeps a history of your Bitcoin Cash transactions. There are many different wallets across various platforms. While they all share certain basic functionality, features vary from one wallet to the other so it’s worth learning more about How to Choose a Bitcoin Wallet before downloading the wallet of your choice.
A Bitcoin wallet is needed to receive and send bitcoins. It’s easy to create a Bitcoin wallet, but there are many different types with various security.
With Bitcoin, you have a private and public key that you keep in a wallet. Simply explained, your public key acts as your email address and your private key as your password.
This means you need to protect your private key and not show it to anyone. That’s why you need a secure Bitcoin wallet.
If you want to buy Bitcoin for a smaller amount, you can use an online wallet. That is automatically created when you open an account at a Bitcoin exchange. We help you choose a secure Bitcoin exchange.
However, we strongly recommend buying a hardware wallet if you want to buy bitcoin on a regular basis or for a larger amount. That is the best type of Bitcoin wallet because it’s both easy to use and very secure.
If you create your own online wallet or software wallet, you should back up your private key and keep it offline. You don’t need to think about that with a hardware wallet because it protects your private keys for you.
2.Add Bitcoin or Bitcoin Cash to your wallet
Now that you have a wallet, you probably want to add some bitcoin to your balance. Have your Bitcoin or Bitcoin Cash wallet address ready and visit the buy Bitcoin page. Here, you will be able to easily purchase bitcoins with a credit card. You can also buy BCH and BTC right from the wallet mobile app.
Another option is to choose a Bitcoin Exchange where you can quickly set up an account and buy bitcoins with funds from a bank account or credit card. Keep your private key(s) private and never share with anyone. It is very important to backup your wallet’s private key and any other credentials for offline storage. Failing to backup could result in the loss of your Bitcoin holdings if you should ever lose the device on which the wallet is installed.
3.Secure Your Bitcoins
The next step is to secure your Bitcoin by taking control of your private keys. Now you need a secure Bitcoin wallet that we helped you with in the first step.
When you buy Bitcoin on an exchange, the money (private key) is kept in your account at the exchange. This is risky as the company stores and controls your Bitcoin.
The whole purpose of Bitcoin is to control and protect your own money. If you keep your Bitcoin on an exchange, your account may be restricted or blocked. In the worst case, you lose your Bitcoin if the company goes bankrupt.
For your Bitcoin to be secure, you need to transfer them from the exchange to a secure Bitcoin wallet. Once you have bought Bitcoin on a marketplace, we strongly recommend that you transfer them to a secure hardware wallet.
4.Use a bitcoin wallet to send and receive bitcoins
Receiving bitcoins is as easy as giving the sender your public address. Sending bitcoin requires a few more steps and since bitcoin transactions are irreversible, it is important to pay attention when sending. Overall, the process for sending bitcoin is actually quite easy:
- Copy the receiver’s public Bitcoin address (or scan QR code)
- Open your wallet and navigate to its “Send” feature, paste the receiver’s address into the appropriate field
- Specify the amount you want to send
- Confirm that the address and amount are both correct
Bitcoin Cash is accepted by thousands of individuals plus many websites, and brick-and-mortar businesses around the world.
Important Security Information
There are a variety of Bitcoin exchanges and services on the market. You should carefully evaluate products and services before using them. Beginners who are not aware of the security can lose their money.
However, it’s important to point out that Bitcoin is secure because it is based on mathematics. You can’t trick math. Likewise, you can’t trick Bitcoin. You only risk your Bitcoin if you use non-trusted exchanges and services.
Below we have listed important information to protect your Bitcoin. If you are aware of this and follow the guidelines, there is nothing to worry about.
First of all, you need to know that Bitcoin transactions cannot be refunded. In that way, it works like digital cash. Bitcoin offers more freedom but at the same time more responsibility.
Secondly, a Bitcoin transaction is only valid if it has been confirmed on the network. To complete a large transaction, we recommend that you wait for 6 confirmations to be on the safe side. The number of confirmations is usually displayed in the wallet or exchange.
Bitcoin is pseudo-anonymous. This means that you can send and receive money without having to identify yourself. However, if your identity is linked to a wallet, you can map all transactions to it. All transactions are stored in a shared ledger and users can either be public or anonymous.
There are many different types of Bitcoin wallets to choose from. But if you are serious about Bitcoin and want to protect your money properly, you should buy a hardware wallet. This is the safest way to protect and store Bitcoin.
There are hundreds of different cryptocurrencies and even more exchanges. Firstly, there are many unreliable exchanges that are not secure. Second, never store Bitcoin at an exchange, but instead transfer them to a private and secure wallet. At the end of the guide, we have listed popular exchanges where you can easily and safely buy Bitcoin.
Why Use Bitcoin?
Why should I use Bitcoin instead of my credit/debit card or cash? There are many answers to that question because Bitcoin has many different uses. Below we summarize the main benefits of using Bitcoin.
- Fast payments globally
With Bitcoin, you can transfer money around the world in just a few seconds. Bitcoin is the first global currency.
- Extremely low transaction fees
It costs almost nothing to transfer bitcoin. In addition, fees are voluntary in the network.
- Bitcoin is a secure system
Bitcoin is impossible to counterfeit and is secure with the help of math and cryptography. The current financial system is secured by laws which will always contain loopholes.
- You don’t need to trust any third party
There is no intermediary that can deny your transaction or demand expensive fees. All payments are made person-to-person without having to rely on any company. You control your own money.
- Bitcoin is anonymous but also transparent
It’s anonymous because you don’t need to identify yourself in the Bitcoin network. It’s transparent because the ledger of all transactions is public.
- The Bitcoin network is decentralized
The digital currency is decentralized in the same way as the internet. Bitcoin is more fair because no single group can control or manipulate it.
- Protect your money against inflation
Perhaps the biggest advantage of Bitcoin is that your money is protected against inflation. Bitcoin has a limited supply to preserve the value of your money.
What is its benefit as an investment tool?
Bitcoin is highly volatile, the price is highly speculative and the cryptocurrency market is largely unregulated.
Individuals who are looking to invest in Bitcoin must go in at their own risk and be prepared to lose all their investments.
The benefit of using Bitcoins to transact is that it can be transferred anywhere around the world and be withdrawn from any exchange no matter where the individual is.
What are the risks?
There’s risk as well as a great opportunity with Bitcoin. While it has been appealing to criminals due to its anonymity and lack of regulation, there are lots of benefits to all of us if you’re willing to accept some risk to jump into the Bitcoin marketplace. Since there is no governing body, it can be difficult to resolve issues if Bitcoins get stolen or lost. In 2014 Mt. Gox went offline, and 850,000 Bitcoins were never recovered. Once a transaction hits the blockchain it’s final. Since Bitcoin is relatively new, there are still a lot of unknowns and its value is very volatile and can change significantly daily.
So, the jury’s still out if Bitcoin will accomplish what its proponents predict, the replacement of government-controlled, centralized money. I fully expect 2018 to give us even more insight about the future of Bitcoin as the technology continues to grow and mature.
Technology is improving every year, and new applications are continuously developed.
To avoid mistakes, you need to stay up to date. For example, more cryptocurrencies are created, and some use Bitcoin in its name. This can be confusing for new users and lead to mistakes. You should keep track of the Bitcoin price and other cryptocurrency prices