Bitcoin for Beginners – TechRound

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Almost everyone who knows Bitcoin knows that it is the first successful digital currency. However, many people do not know how this virtual currency works. What may intrigue many people is the increasing number of Bitcoin investors and traders. But Bitcoin is not the only virtual currency in the world.

Recently, some governments have started creating centralized digital currencies. For example, China introduced a digital yuan. Today the Chinese can trade with this virtual currency (, the authorized distributor of the digital currency issued by the central bank. Nevertheless, Bitcoin dominates all cryptocurrencies. So what is this dominant virtual currency for a beginner?

What is Bitcoin?

Bitcoin is a virtual or electronic currency that operates on a decentralized network. A public ledger or the blockchain records every transaction that users complete using this digital currency. Bitcoin allows users to remain anonymous with encrypted keys.

People can trade bitcoin without intermediaries. This means that you don’t have to go through a financial service provider like a bank when transacting with Bitcoin. Also, Bitcoin does not require a central authority, such as a government, to function. Instead, miners generate new coins by validating transactions.

When using bitcoin you don’t need your real identity or your name, account number or anything that could link the transaction to you. You can buy or sell anything with bitcoin without leaving any footprints that criminals can easily use to track you.

Bitcoin’s creation

Satoshi Nakamoto, a mysterious developer, created Bitcoin. Its launch in 2009 ushered in a digital currency and crypto asset the world had never had before. However, the world does not know if Satoshi Nakamoto is a person or a group of individuals.

According to the Bitcoin white paper, the goal of this virtual currency was to introduce a peer-to-peer cash system that does not involve a central authority. Thus, Bitcoin is fully decentralized.

Some people argue that Satoshi created Bitcoin in response to the 2008 financial crisis with the aim of putting people back in the hands of the people who were suffering from the greed of central authorities and big banks.

Satoshi capped Bitcoin’s supply at 21 million coins. Miners generate new bitcoins by solving complex mathematical puzzles or mining new tokens. Mining new bitcoins is not easy as it requires a lot of power and computing power.

The Bitcoin network rewards miners with new tokens for solving math puzzles. And the reward diminishes every four years, a process known as the Bitcoin halving. The Bitcoin halving is crucial as it ensures that miners generate all 21 million coins within the lifetime of the protocol. And this ensures that Bitcoin retains its value and remains immune to the inflation most people associate with fiat money.

How to get and store bitcoin

Bitcoin mining is not the only way to get hold of this virtual currency. You can also receive bitcoin as payment for services and goods. Also, people buy bitcoin on crypto exchanges with fiat money. Perhaps this is the fastest and easiest way to get Bitcoin.

It is important to note that you need a bitcoin wallet to receive, store and send this virtual currency. A digital wallet is an application that you install on a smartphone or computer. It consists of an address, a long string of letters and numbers, and a private key used to digitally sign transactions.

Ideally, a bitcoin wallet is like a bank account that allows you to receive and send bitcoins. Also, you can use the application to scan the QR code of a bitcoin address when sending money.

Use of Bitcoin

People use Bitcoin to pay for services and goods. Others speculate on bitcoin prices to make a profit from trading. Alternatively, some people buy and hold their tokens as an investment.

— TechRound does not endorse or endorse any financial investment or practice. All information in articles is purely informative— Bitcoin for Beginners – TechRound

Fry Electronics Team

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