You should have heard about Bitcoin, except you probably live under a rock or are still living in the medieval times. Whether you have or you have not, there is a certain level of knowledge about it circulating on the internet.
For the sake of this piece, let us look at what Bitcoin is.
Bitcoin is, basically, computer software that is acceptable in some countries as a means of payment. Some shops or individuals accept it as a payment method for goods bought or services rendered in some countries where Bitcoin is banned.
Each Bitcoin is a type of computer file that is saved in a 'digital wallet' application on a computer or smartphone.
People can send Bitcoins (or some parts of it) to and from each other's digital wallet, and all of these transactions are recorded in a public list that is referred to as the blockchain.
This allows for the possibility to monitor the history of Bitcoins, to make sure people are stopped from spending coins that are not theirs, making duplicates, or undo-ing transactions.
The blockchain is a shared public ledger which the entire Bitcoin network relies upon. All confirmed transactions are included in the blockchain. It allows Bitcoin wallets to calculate their balances that are spendable so that new transactions can be verified, thereby ensuring the spender owns them. The chronological order and integrity of the blockchain are ensured with cryptography.
True, there are images of some coins emblazoned with a Thai Baht symbols, claiming to be Bitcoin, well, those are just image representations, without the private codes in the coin, they are utterly useless.
Bitcoin is the first of several hundred attempts to create virtual money that saw the light of day. It is the first money created using cryptography - the art of breaking and making codes.
Presently, people prefer Bitcoin to money because they like the idea that Bitcoin is not in the control of the government or any banks. Anyone can access and make use of the Bitcoin network, and your religion, political affiliations, species, ethnicity, or gender are not relevant. This ensures a wide variety of possibilities for the internet of things.
Furthermore, people can spend their Bitcoins, almost anonymously. That is because, although all transactions are recorded, individual 'account numbers' are not known until it is personally revealed.
This versatility has brought Bitcoin to the attention of private corporations, government, and corporate bodies; in fact, some analysts opined that blockchain technology would, most likely, be the most impactful aspect of the cryptocurrency world.
A transaction is a transfer of value between Bitcoin wallets that will be recorded on the blockchain. Bitcoin wallets keep a secured data piece referred to as a private key or seed, which can be used to sign transactions, mathematically proving that they have come from the owner of the wallet.
The signature also ensures that no one alters transactions once it has been issued. All transactions are transferred to the network and are usually ready to be confirmed within 10-20 minutes, via a process referred to as mining.
Mining is a distributed consensus system used to affirm waiting transactions by adding them to the blockchain. It enforces a chronological order in the blockchain, secures the anonymity of the network while allowing different computers to reach an agreement on the state of the system.
To be affirmed, transactions must be packed in a block that conforms with stringent cryptographic rules that will be certified by the network. These rules ensure that previous blocks are not being edited because doing so would invalidate all the subsequent blocks.
Mining also creates the equivalent of a competitive lottery, making sure that any individual cannot easily add new blocks consecutively to the blockchain. This way, individuals or groups can not control what is included in the blockchain or modify parts of the blockchain to get their spending back.
How to get Bitcoins
Given the value and popularity of bitcoins in the current system, it is normal that more people are picking up interest in storing the asset and using it for transactions.
Nevertheless, there are a vast number of interested individuals but don't know how to acquire this resource.
Getting bitcoins isn't as complicated or technical as many views it. The resource can be acquired via the three means highlighted below:
Buying: Yes! Bitcoins can be bought with cash! You only need to get in touch with individuals in possession who are ready to exchange it for real money. There are also websites, stores, companies, and traders offering this exchange service.
Getting paid in Bitcoin: You can sell products or offer services and let customers pay you with the asset. Many of the highly-rated stores are now accepting bitcoins for payments, and it's becoming popular due to its simplicity and speed.
They can be created with a computer: There are specialized computers made by people to generate bitcoins. For the bitcoin system to function, people make their computers to work out transactions involving difficult sums and occasionally get rewarded with bitcoins.
Is Bitcoin Secure?
The security of the bitcoin system remains debatable. The government or banks don't control the system. As such, it offers a high level of Independence and anonymity, and that's one of the reasons why it has become so popular with many.
However, the absence of a controlling unit also has its implications on security. Individuals will need to take security measures themselves to protect their resources.
Meanwhile, all transactions on the system are recorded publicly, making it difficult to copy bitcoins, make counterfeit ones, or squander the ones you don't own.
But you could also lose your Bitcoin wallet or forfeit your Bitcoins and lose them forever. Thefts have also been recorded from websites that allow people to store their bitcoins remotely.