What is Bitcoin?
The bitcoin system is one of the first types of crypto-currency which has existed in the market since January 2009. What makes bitcoin different from regular currencies is the fact that bitcoin uses cryptography to monitor and control the creation and transfer of the currency between different parties. Bitcoins are generated over time at a diminishing rate, and the maximum amount of bitcoins in the market at one time is 21 million units. The usage of bitcoin eliminates the need of a third party when it comes to completing online transactions.
How Bitcoins are generated?
Bitcoins are a digital currency created in 2001 by Satoshi Nakamoto. It is based on open source software and P2P networks with no central authority or issuers. The coins are saved on your computer in a wallet file or in a third party wallet. They can be exchanged between anyone with a Bitcoins address. The database of transactions is spread across a peer to peer network. They also use digital signatures to ensure they are only spent once and by the person who owns them.
They are created by a process known as Bitcoin mining.
While the transactions are public
the transactions themselves are psudeononymous.
Many people who are concerned about privacy like to use Bitcoins for this reason.
They are bought through Cryptolus.
There they can be exchanged into traditional currencies like the Dollar or Euro or for virtual world currencies like the Linden dollar.
Bitcoins have no central control
so they cannot be controlled by any government or authority. There are also no chargebacks
There is a limit to how many can be created.
There can be 21 million Bitcoins in total. This is to avoid the currency from becoming worthless from overproduction like fiat money. Diminishing geometric expansion combined with the expansion of Bitcoins provides an incentive for early adopters.
Advantages of Bitcoin
What makes bitcoin different from other online currency systems like Paypal is that the currency is decentralized.
This means that no group or organization has a control over it. This is unlike real currency that is monitored by central authorities.
Real currency is controlled in terms of the printing and distribution of coins and notes to the public.
And compared to other online payment systems, there are little to zero charges to transfer bitcoins. Using bitcoins will be especially useful for businesses which carry out a majority of its transactions online.
How to Start?
To start using bitcoins
all you need is a bitcoin wallet. Since bitcoin is a virtual currency, you cannot hold it physically, unless you exchange it for goods and services. Your e-wallet is where your bitcoins are kept secure. E-wallets are convenient and easy to use. You can find many bitcoin wallet providers like My Wallet from blockchain.info.
And if you feel that your bitcoin wallet is unsafe
you will want to have desktop clients to store actual bitcoins onto your laptop or PC. When you start a wallet, remember to save the file on the computer and back up the file. Make multiple backups if you feel insecure. Using bitcoins give users a sense of safety, as they are not relying on other parties like banks to take care of their funds. Most users will prefer to use the original software which has been around since the inception of bitcoins – the Satoshi Client.
Your bitcoin wallet can also be accessed
via your smartphone. Having a smartphone will enable you to sell and buy bitcoins wherever you are.
After creating your wallet
you are on the way to selling and buying bitcoins. There are many ways that you can obtain this online currency. You can buy bitcoin and other cryptocurrencies using Cryptolus. Bitcoin is a growing currency and will most definitely be one of the top items in the online world in the near future. For more information about bitcoins and bitcoin wallet, feel free to search the Internet for more information. With the usage of bitcoins, you will be able to earn extra income and you will have an additional way to receive and make virtual payments.