Bitcoin – what is it and how to start?

Bitcoin is one of the hottest topics for economists and journalists on the subject of currencies. The history of this digital money is rich in alternating turns of fortune and setbacks, and the events associated with it have affected countless people. Below you will find the current exchange rate and its advantages.

Bitcoin – what is it?

Bitcoin is a virtual currency that is divided into smaller units (up to 8 decimal places = 0.00000001BTC) called satoshi. can be saved on your computer as a file or on external services for this purpose in so-called wallets. Bitcoins can then be easily exchanged for another currency using exchange offices or exchanges.

How to make money on it?

Unfortunately Bitcoin remains a very high risk investment. It is difficult to predict whether the price of this cryptocurrency will rise or fall (you can see on the chart above). So investing in bitcoin can be risky but also very profitable. If someone doesn’t like risk and doesn’t want to risk their own money then the same Earning Bitcoin is still a very good idea.

Advantages of btc

  • Very fast transactions. Virtual currency sent to another user is received by them in about ten minutes,
  • Very little or no commissions,
  • Anonymity of transactions. The bitcoin address of your wallet can be changed with each transfer,
  • No intermediaries. Bitcoin goes directly to the recipient,
  • Inflation protection. It is not possible to print additional coins beyond the maximum amount,
  • There is no possibility to block the account. The system works on a p2p basis, so there is no owner,
  • It is very simple to use,
  • It is not possible to undo a transaction,
  • Security. With proper precautions and encryption, the risk of losing funds is minimal,
  • Convenience. After installing the wallet you can use it without creating an account.

Wallets for storing btc

To store cryptocurrency you need special wallets (you can use the exchange described below and store it there). They are divided into wallets:

  • in the form of a computer application This type of wallet can only be used on the computer where it is installed. It can also be carried on a USB stick, which increases mobility,
  • offline No need for an internet connection to store bitcoins. PaperWallet also allows you to print a bill,
  • browser – very mobile wallet because it only requires a browser on any device with internet. The following exchange can also be treated as a wallet of this type.
  • mobile – apps for phones, also allows you to pay by scanning a QR code,
  • hardware wallets – USB key. It only requires a free USB port on your computer.

The birth of bitcoin

Satoshi Nakamoto (or rather the group behind the name) is credited with creating the Bitcoin digital currency system. The year 2009 is considered to be the start of this currency. No one has the slightest idea what computer lab is behind the idea. No hacker or government groups have also claimed responsibility for creating the system. What we know suggests that it is impossible for it to be created by a single person. The system itself works on the basis of extremely complex algorithms and p2p networks (peer-to-peer). That is, the process we are talking about has no official intermediaries in the form of official government or banking institutions. The peer-to-peer system is based on the operation of a huge number of different interconnected machines. The whole system raises a lot of questions and emotions in many experts on the subject. We can find out about this by browsing any forum dedicated to this topic.

Bitcoin itself is „mined” by sharing our computer and its processing power with a peer-to-peer system. The chances of it being produced just in our virtual mine are very small. The creators have included an interesting algorithm inside, namely, the more computers „mining” the currency, the lower the chances of receiving it. A currency transaction (in bitcoin) made on a p2p system can be used to transfer virtual currency funds directly to another computer system on the other side of the network. These funds then can be used to make purchases, send them onward, or convert them into money proper in the recipient country.

Bitcoin Cash – first split

On August 1, 2017, there was a split in the world of virtual currencies. In response to conflicting visions about the development and technological limitations of bitcoin, a new virtual currency was created – Bitcoin Cash. The focal point of the dispute turned out to be primarily the network serving Bitocoin, as it could not cope with its growing popularity. BTC transactions were stored in 1MB blocks, which cause delays in processing operations. The cost of prioritizing a particular transaction over others has become increasingly large. Bitcoin Cash (or BBC/BCH) has a higher transaction throughput.

The new cryptocurrency is more difficult to mine because its blocks are larger (8 MB). For its “digging” you need to use mines with very high computing power.

Most sites and exchanges have come out in favor of Bitcoin Cash, but some of them do not want to recognize this new virtual currency. Coinbase and Poloniex are examples of this and explain their decision by saying that they are not sure if the new currency will be able to sustain itself in the market. BTC is backed by Kraken and ViaBTC, however the former does not want to take responsibility for the possible loss of BCC/BCH.

In the wallet of people investing in Bitcoins now there will be two types of virtual currency, which will operate independently of each other. Whether BCC will be successful will depend on the interest of miners and users.

Bitcoin Gold – another division

On October 25, 2017, a hard fork of bitcoin – Bitcoin Gold entered the cryptocurrency market. Its launch, however, was not a success. Currently, it is not yet possible to mine or transact Bitcoin Gold. This does not mean that the new currency will be written off.

It is a hard fork to split the Bitcoin chain in order to create Bitcoin Gold. Fork will consist of minor changes to the underlying Bitcoin Core code. However, the main bargaining chip of the developers is the change of the Proof-of-Work consensus algorithm from SHA256 to Equihash, where RAM resources play a huge role. People who dig ZCASH should know this name because the same algorithm has been implemented in it, which has been optimized for cryptocurrency digging using GPU. So anyone who owns a conventional digger, consisting of several graphics cards used for mining Ethereum and ZCash, could start digging BTG.

BTG is still controversial before the first blocks are dug up. Besides there are not many companies that announce their support for this fork.

Other cryptocurrencies

Bitcoin is the first and undoubtedly the most popular cryptocurrency which has increased interest in virtual currencies. Many altcoins have been created that are far from bitcoin, but this does not mean that other cryptocurrencies are not worthy of interest. Sometimes less popular allow you to make more money due to a lower initial rate.

The future of bitcoin

Visionaries of virtual currencies and information technology of the future are divided on the future of Bitcoin. There are people who appreciate the simplicity of this system and see it as the international currency of the future. After all, more and more stores allow you to pay with Bitcoin. However, there are also skeptical voices, and as a result, Bitcoin has an indefinite future that no one can really see.

2 comments on “Bitcoin – what is it and how to get started?”

By the end of 2018. I got a bit „swam ” on bitcoin, which is fluctuating dramatically. It only took a few hours of inattention and everything I invested in buying it was gone and instead of making money I lost it, You have to be very careful and keep an eye on the exchange rate to not lose too much.

I think that this form of earning is not entirely good.. How do I know if I won’t accidentally lose everything I have so far. On the one hand, it’s fun to make money, but you have to know it to the max.. Those who can’t do it shouldn’t get into it because they may not gain anything and on the contrary only lose.

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