The bitcoin is a digital currency or a cryptocurrency that has market value. Bitcoin is not a physical coin or a paper and it is held electronically i.e bitcoins can be stored only in computers, servers etc. Though bitcoins are not physical they have very high value, let say 1 Bitcoin = +/- $600 and can be converted into local currencies. The value of bitcoins is keep on increasing day by day. So, it is the right time to start accumulating in your wallet.
Why Bitcoins? | Advantages of bitcoins:
- Bitcoin has its own advantages and one of the significance of bitcoin is they are not controlled by any government or organization or anything else i.e. bitcoins are decentralized. Bitcoins are the open source and they are not subjected to taxes. An individual can have how much ever bitcoin he wants and he doesn't have to pay any taxes for the bitcoin he owns.
- Zero transaction fees - this is the second most valuable advantage of bitcoins. For instance, if you want to transfer your friend or if you wish to buy something online you must pay a part of the amount as transaction fees to the bank or financial company. In the case of bitcoins transaction fee is zero even if you want to transfer millions of dollars.
- No middle man - as said above you don't have to depend on banks to transfer amount to your friends or purchasing products and services online. To transfer bitcoin to some just enter their bitcoin address and click send.
- Transaction speed - the bitcoin transaction speed is very fast that the receiver will receive the bitcoin in next second without any middle man.
- When bitcoin were introduced to the market the value of one bitcoin was $8, but now the rate of 1 bitcoin has increased like anything to several hundred dollars make it the costliest currency in the world(might change). So, think you accumulated the bitcoins when the value of the bitcoin was $20 and sell it while the value is $300. So, bitcoin is like gold and not that gold value is not fixed.
What is a Bitcoin - Video:
Who invented bitcoin:
- A software developer from Japan named Satoshi Nakamoto has invented bitcoins on 2008. He also released the software as open source so anybody can use it.
How does a bitcoin address looks like:
- An example of bitcoin address - 1NgKzevNoA7eH3YAuPV5........
Dollars & cents | Bitcoins & Satoshi:
- The decimal part of the dollar is called as the Cent. Similarly, the decimal part of the bitcoin is called a satoshi.
- $1 = 100 cents.
- 1฿ = 100000000 satoshi.
How bitcoins are created:
- As I said earlier bitcoins are not physical currencies, hence they cannot be created as coins, currency notes, gold bars etc.
- So, how bitcoins are created? Bitcoins are not created it is mined and this process is called as bitcoin mining.
- Bitcoin mining is solving some mathematical calculations which are used to mine bitcoins. Mining is performed by computers and for good results, special computers that are designed to mine bitcoins are used.
Related link: Learn more about bitcoin mining.
Where the bitcoins are stored:
- The bitcoins are stored on a bitcoin wallet. There are several types of wallets, the wallet software that can be installed in the computer, the wallet app on the mobile phone, the internet wallet websites, the online exchange wallets etc.
- Bitcoins can be stored anywhere but have to be protected carefully from being deleted. Bitcoins stored in computers are vulnerable to get deleted and similarly if an internet wallet is closed all the bitcoins cannot be retained. So, it is important to choose the best internet services, if not bitcoins can be stored on our own computers.
- The transaction of the bitcoins is stored in a public ledger called as the block chain.
What is the use of bitcoins | how to use bitcoins:
- As said earlier bitcoins can be converted into local currencies like USD, AUD, INR, GBP, EURO etc.
- Apart from converting it to cash there are several ways to use bitcoins,
- Bitcoins can be used to purchase physical products like mobile phones, electronics, wearable etc from online shopping markets. There are several online shopping sites which sell products for bitcoins and they deliver worldwide.
- Bitcoins are great currencies to buy online services like SEO, designing, web hosting, etc on service marketplaces like Fiverr. Bitcoins can save lots of money used as transaction fees.
- Bitcoins are used for gambling. But gambling bitcoins one can win more bitcoins or lose available bitcoins.
- Bitcoins are used for trading. Bitcoin trading is one of the best ways to multiply the available bitcoins at no time. But, bitcoin trading is risky for beginners.
Disadvantages of bitcoins:
- Bitcoins are used for illegal transactions as no one would questions. Even if someone makes million dollars (black money) bitcoin transaction, it is legal and they are safe.
- Bitcoins without proper protection are prone to get hacked. If bitcoins are hacked we can't get it back or we cannot take any further legal action.