Bitcoin 101 – Guide for Beginners

Bitcoin is a digital currency that has a certain value. You can send or receive Bitcoin from anywhere in the world – there are no restrictions. It’s not owned by any corporation or governmental institution. A completely decentralized network that is created and developed by the community.

One of the biggest advantages of the Bitcoin network is privacy. There are no names or other details that could be used to identify you in the network, complete anonymity is guaranteed. It might be concerning that the network will be used by criminals to launder money or fund crimes, but that’s the price you have to pay for anonymity.

Bitcoin can be used to pay when shopping online or in real life. It is also a convenient way to transfer funds to others. It’s also a great way to make money if you know how it works.

A lot of people are still asking themselves what is bitcoin and how to make use of this mysterious digital currency, so we are here to provide you with answers that are straight and understandable.

Technology Behind Bitcoin

This is probably the most important thing that made Bitcoin so famous and widely used – blockchain technology. It’s a digital record book that consists of blocks full of information. Those blocks are connected into chains and saved for good, that’s why it is called blockchain.

The information in those blocks are encrypted and anonymous – this makes the network really secure. You might wonder what kind of information is stored there, so it’s basically information about Bitcoin transactions. Every money transfer is saved in the blockchain, so it can be traced. Even the first Bitcoin transaction ever.

There is a need for a lot of computing power to encrypt and store all those transactions and this need only grows while the popularity of Bitcoin is rising. This is where miners step in. Users (or companies) from all over the world connect computers or mining rigs to the Bitcoin network and solve mathematical tasks to encrypt the data and keep the blockchain running. They get a reward for that – a certain amount of Bitcoins that depends on the computing power they provide.

This technology can be applied to industries, and that’s why it is so perspective. It can be used as the most secure way to store information and operate complex systems.

How to Buy, Sell and Keep Bitcoins

In order to receive Bitcoins and own them, you need to have a virtual crypto wallet. It’s like your bank account – you can log into it from anywhere and make transactions whenever you like. Just to make clear, your Bitcoins won’t be actually stored in the wallet. It’s just a secure place to keep your private keys that are needed to access the Bitcoin network.

These wallets can be either digital or based on hardware. Most crypto exchanges offer digital crypto wallets, but if you want to be even more secured and save your keys offline, you can use a USB flash drive or an external hard drive as your wallet.

Bitcoin can be bought online since there are tons of exchanges that are willing to exchange Bitcoins to traditional currency or other cryptocurrencies. All you need to do is register on one of those exchange websites, confirm your identity and you are good to go. The same goes for selling – you can do that exactly the same.

Also, there is an option to buy Bitcoins in real life. There are people willing to meet with you and change cash to Bitcoins. However, that might be dangerous and we do not suggest doing that.

Why You Should Use Bitcoin?

Now you probably have a clue on how this Bitcoin technology works, but what’s the point of using it? Well, there are many advantages. First of all, it gives you freedom. Banks and governments are constantly making our lives harder with new restrictions and regulations. Bitcoin is not like that – you can store any amount of money there, travel with it safely and spend it how you like.

Bitcoin was launched just after a 2008 global financial crisis struck. It was offered as an alternative to the traditional banking system that certainly features some disadvantages. This network is decentralized and “owned” by the users, so if you are skeptical about politics and the modern economy, the Bitcoin community is a place for you.

Finally, there is security. You don’t need to reveal your identity, you don’t need to provide your data to large corporations so they could use it for marketing, you don’t have to make any commitments.

If you are interested in Bitcoin and blockchain technology, there are free online courses that will help you to learn more about the technology and economy behind cryptocurrencies.