A Beginners Guide to learn about very popular cryptocurrency, Bitcoin!
When you plan to learn bitcoin details, it’s completely unbelievable to learn about creating money. Bitcoin is today’s time is the best and most popular cryptocurrency across the world. Before you step into the world of bitcoin and other cryptocurrencies, you need to learn about its working, earning method, and all other things. Visit Crypto News and learn about trading bitcoin through a very popular platform.
Before we move forward and learn about investing in cryptocurrencies like bitcoin and others, you need to know that investing in cryptocurrencies is speculative because the cryptocurrency market is unregulated. If you plan to invest in it, you must also be ready about the losses incurred in your investment.
History of Bitcoin
Bitcoin was the first cryptocurrency that was established in the cryptocurrency world. It can also be referred to as a digital asset that stores all its transactions in a digital ledger secured using cryptographic principles. Bitcoin is designed in a way to provide users a medium of exchange that follows a peer-to-peer network. It means just like fiat currencies, users can exchange cryptocurrencies for the exchange of goods and services.
Multiple other versions of cryptocurrencies were developed and even tried to follow bitcoin’s footsteps, but no other cryptocurrency became fully developed like bitcoin and attained heights. Bitcoin became available to the public in 2009 through a mysterious entity known under the name Satoshi Nakamoto. He tried to create a bitcoin network entirely different from fiat currencies, and there are some major points of difference between fiat and cryptocurrencies that make cryptocurrencies a better option.
Satoshi Nakamoto is an anonymous identity that introduced bitcoin’s whitepaper by stating, “Bitcoin: A new electronic cash system.” Later in the mid-2010s, Satoshi suddenly got disappeared, leaving the bitcoin community in confusion.
What is Bitcoin, and what is the need for digital currencies?
Bitcoin is a virtual currency which means it doesn’t exist in physical form and only exists virtually. There are no coins or notes that are to be printed. It is a decentralized currency that eliminates the need for any third-party, including financial institutions or government. No one has control over digital currencies like bitcoin, and no central authority is required to complete, verify or authenticate bitcoin transactions.
Satoshi focused on creating transactions completely anonymous. The bitcoin owners don’t have to share or fill in their personal information or add their information like names, phone numbers, and account numbers while investing or storing bitcoins. Bitcoin owners can only be identified based on wallet addresses that you’ll read about in forthcoming paragraphs.
Bitcoin is built on blockchain technology that uses cryptographic principles to secure transactions and uses encryption keys to build a connection between buyers and sellers across the world. Like precious metals are mined, bitcoin is also mined.
How are Bitcoins mined?
Individuals and extremely powerful computers mine bitcoins. The supply of bitcoin is finite as there are only 21 million bitcoins that could ever exist. Out of 21 million, currently, there are 18.5 million bitcoins that are in circulation. Bitcoin mining is the process where individuals, also known as miners, use extremely powerful computers with high computing power to solve complicated mathematical problems to verify bitcoin transactions.
The complexity of bitcoin transactions keeps on getting harder over time. The miners are given a time of 10 minutes to solve a block of transactions. Every time a mathematical problem is solved, a block is generated that carries the bitcoin transactions and is further added into the blockchain. Each block is connected to its previous block, and each block has a unique number that makes it easily identifiable and different from other blocks.
The miners are rewarded for solving a block of transactions. Each time a miner solves a block, he/she is rewarded with a block reward that has come down to 6.25 BTC. Earlier in 2009, the block reward was 50 BTC, but a mining protocol states that block reward is set to get halved after every four years. Mining bitcoin is one of the main methods for individuals to make money by investing in powerful computers. The mining process can be accomplished from anywhere and from any powerful device.