Bitcoin is not controlled by a financial organization or government, it is a decentralized currency.
Bitcoin is a payment system that was introduced in 2009 by Satoshi Nakamoto. The system of payments are recorded in a ledger to disclose each transaction further to the public using its own unit also known as bitcoin. Where as these types of online valuation systems are not thought of as real currency, bitcoin is often thought of as a digital currency, virtual currency, electronic cash, or cryptocurrency.
Because bitcoin can be transferred from person to person, theyre generally represented as digital money.
What is bitcoin used for?
Bitcoin can be used as a medium of exchange for people to transfer value to one another without the need of central bank and government regulations. Bitcoin allows users to send money openly from one person to another through its global network. Simply put, I could send you any amount of value from and to anywhere in the world almost instantly and with very little or no transaction fees at all! Additionally, bitcoin can be used to purchase goods or services from vendors, suppliers, and online merchants who have opted to accept this currency.
With the bitcoin’s growth over the last five years, more and more businesses are transitioning to bitcoin as a means of payment. This currency really gives the power back to the people because it has such low fees to use it and cuts out the middle man from raking every transaction of your hard earned money.
Bitcoin is also used as a form of investment. Because bitcoin is not like fiat currency, investors have found it to be a great way to capitalize on its profit potential by trading it on the bitcoin exchanges. Be warned, bitcoin does have a reputation of being quite volatile at times, making huge gains as well as huge losses for investors for some people. How ever if you learn about bitcoin you will surely see why it has so much potential and investors are flawking to it.
Bitcoin is becoming stronger and more common by the day, making it less volatile. It is expected that as the bitcoin prices rises and usage grows the volatility will decrease. This is good for users who are looking for a more stable investment. The most popular BTC (Bitcoin) exchanges at the moment are Bitstamp, Poloniex, and Bittrex. There are many more bitcoin exchanges in almost every country of the world at this point for users to choose from to buy, sell and trade bitcoins or other cryptocurrencies.
A list of these exchanges can be found on bitcoinwisdom, which not only outlines these exchanges but also gives your real time analytics about the price of bitcoin and the recent transactions made on these exchanges.
How to get started
First download what is called a bitcoin wallet. This is exactly what it sounds like, a digital wallet (bank account) that is used to store your bitcoins for safekeeping. Each wallet is equipped with a unique wallet address that is used for the transfer of bitcoins from one person to another. This address is a combination of 34 random characters and numbers that represent your wallet. After your wallet is downloaded and installed you can also encrypt your wallet and add a password to it for security. Some wallets when first downloaded will need to update the blockchain with all the latest blocks such as bitcoin qt.
The most common bitcoin wallet is Bitcoin QT. It has been the wallet of choice for most bitcoin users mostly because it runs directly off the bitcoin block chain to ensure transactions have been fully verified. Known as the most secure Bitcoin QT also offers an encrypted password feature making it almost impossible for others to steal your hard-earned bitcoins. This is just one of the many bitcoin wallet options. There is also mobile wallets and wallets that do not require the blockchain download. These are great for quick and easy use but are not always the most secure so I would reccomend not using those for large amounts of money. You can visit www.bitcoin.org to see a complete list of bitcoin wallets available for users.
Once you have your wallet, which also contains your unique address, you just need to get some bitcoins. This can be done peer-to-peer or by purchasing BTC from the exchanges mentioned above. Basically, you will give your 34-character unique address to the supplier of your bitcoins, be it a friend or exchange. Once that party has your unique wallet address they can then send you bitcoins directly to your wallet. This transaction will normally take place within a couple of minutes but there have been reports of extreme cases where bitcoin transactions can take up to 3 hours to complete. You will not see the recent transactions in your QT wallet unless you have the blockchain fully downloaded even though they have taken place. One of the best ways to confirm a transaction has taken place it to check the address on blockchain.info this is a record database of all transactions that have taken place using bitcoin.
Now that you have your bitcoins, you are free to spend them wherever you like. To purchase goods you will need your merchant’s unique wallet address to transfer your bitcoins into their wallets. Once this transaction is complete, the merchant will then issue you your goods or services. It’s that easy.
By now you should be equipped with the basic information you need to complete your first bitcoin transaction. There is a little bit of a learning curve for first-time bitcoin users, but do not let this deter you from using bitcoin as its benefits greatly outweigh the need to go through the bitcoin education process. Bitcoin really is very easy to use once you figure out the basics you will be empowered by the bitcoin and see why it is such a great invention and very much needed in todays digital world.