Bitcoin Guide for Beginners

Bitcoin is the term that everyone is talking about in recent times. In simple terms, Bitcoin is a digital currency that has opened up opportunities for investors to make money. This digital currency was launched in 2008 and was created with the aim to have an e-cash system. Bitcoin has an open-sourced code and uses blockchain technology. If you are new to the world of Bitcoin, you should be familiar with certain terms, such as cryptocurrency, blockchain, Bitcoin Mining, Bitcoin Wallet, tokens, etc. This article will make a beginner familiar with Bitcoin-money, its technology, and modes of investment to visit at: 

What is cryptocurrency?

Regardless of the fact whether you are outgoing or an introvert, sitting at home, you must be familiar with the term cryptocurrency despite not being directly involved with it. It is quite a trending term all over the internet and among people these days. To date, Bitcoin is the biggest and the best-known cryptocurrency. The other types of cryptocurrency are Ethereum, Litecoin, Tezos, ZCash, EOS, and others. The entire network works on blockchain technology and thus, the cryptocurrency trading platform is entirely decentralized where the investors or traders do not have to involve any third-party application or central body.

What is  Blockchain?

Cryptocurrencies are secured because they use blockchain technology. This blockchain is similar to the ledger or balance sheet of a bank. This blockchain constantly verifies each transaction that is happening using the currency. The blockchain of a cryptocurrency is available on the internet, unlike the bank’s ledger. Anyone can participate in a transaction and it is not controlled by any country, company, or individual. The best part about bitcoin technology is that no data can be altered, unlike the manual records in the centralized bodies.

Main concepts of cryptocurrency

Here are a few main concepts of cryptocurrency that a rookie might need to know. 

  • Privacy:  No personal details are needed for cryptocurrency transactions. It means users’ financial details are not shared with any third party including payment service providers, banks, advertisers, credit-rating companies, etc. 
  • Security: Cryptocurrencies are secured because they use blockchain technology which is constantly under verification and checking. 
  • Portability: The money is always available to the user, irrespective of the location of the user. 
  • Transparency: Transactions involving cryptocurrencies, such as Bitcoin, Tezos, Ethereum, and others are published in public domains. No transaction can be manipulated. 
  • Irreversibility: The money once transferred through Bitcoin or other cryptocurrencies cannot be reversed, unlike credit card payment. So, traders do not get cheated. Money transaction becomes cheaper for the customers as compared to that credit cards. 

Bitcoin Mining

Bitcoin mining is done with the sole purpose of bringing Bitcoins in the cryptocurrency trade market. The professional miners have to solve complex algorithmic problems for the cryptographic programs. Previously, people could mine out Bitcoins sitting back at home in their private systems but now the programs have become more complex for the sake of enhancing security factors and require a lot of energy consumption which is not possible sitting back at home anymore. Hence, the mining experts have to visit their nearby mining hubs for serving the purpose.

How to use Bitcoin?

A user can earn a Bitcoin by various means. You can either go for mining to get your hands on BTC or other ways include, buying these virtual assets from the crypto exchanges. There are many websites that offer Bitcoins as rewards.  You can shop, gift, or tip someone using Bitcoin and other cryptocurrencies. 

Risks involved in Bitcoins

For investors, Bitcoins might seem to be an attractive way to earn money but there are many risks associated with it. There is a lack of regulators for Bitcoin transactions which makes it prone to fake and fraudulent transactions. Bitcoin is volatile and it is riskier to invest a huge amount of money in it. Those who are new to this Bitcoin world should invest in a small amounts to avoid any major loss for the first few months. 

Market experts anticipate that Bitcoin has great potential and it is going to be a lucrative way of financial transaction.  Japan, has accepted Bitcoin as a means for payment of goods. Many institutional investors are also accepting Bitcoin and this has opened up huge opportunities for cryptocurrency including Bitcoin and others. The security issue of Bitcoins has to be taken care of.