It isn’t a secret anymore, Bitcoin has entered our lives in force, mainly due to its popularity in December, when it reached almost $20k per coin. I know this might seems scary or it may intrigue you, we’re counting for the latter, so let’s dive in and learn about Bitcoin and its basics. While the technology behind it is pretty complicated for the average person, to understand its core fundamentals it’s a pretty easy task. Without further delay, let’s see what’s Bitcoin exactly and how can it influence our daily lives.
Introduction to Bitcoin
Bitcoin was invented in 2009 by Satoshi Nakamoto as a decentralized, anonymous currency – an alternative to our classic currencies. While it got a lot of traction from the crypto community way back then, Bitcoin kept a pretty low profile and nobody knew about it until several years later. Bitcoin runs on a decentralized platform known as the blockchain. The blockchain is a decentralized ledger that records all the transactions made. Basically, if you send some bitcoin to a friend, your transaction will be encrypted and sent into a block then the miners, who basically run the transactions in the blockchain, decrypt and confirm the transactions, moving the block into the blockchain. Once the transaction is confirmed, your friend will receive the Bitcoin amount and everything moves forward. It’s worth keeping in mind that while the blockchain is decentralized and everything is visible, nobody can see or know which real person is behind each wallets address. So that basically that means is that even if somebody can “stalk” your wallet and see all the transactions, unless you tell them who you are, they have absolutely no idea. The blockchain like I said, is a decentralized platform, meaning that nobody can actually control it, everything is done via a confirmation system and everything is visible. Basically, like your normal transaction minus the bank, which is very important to remember.
How can I buy Bitcoin?
Bitcoin can be bought securely from many different markets nowadays, but the most popular one is currently Coinbase. There are also peer-to-peer user driven markets, such as LocalBitcoins, that allow users to buy or sell their Bitcoin, avoiding the exchange fees. However you want to approach this, both versions are viable the only difference being that on the exchanges, you have to provide identification. After you decide to buy your first Bitcoin, you need to choose your wallet. I know this seems a bit complicated but in reality, it’s not.
What is a Bitcoin Wallet?
A Bitcoin Wallet is a digital or physical wallet which hold your private keys used to access your Bitcoins on the blockchain. No wallet will hold your Bitcoins locally, everything is stored on the blockchain. However, you have to understand that different wallets come with their pros and cons and we really advise to look it up before you make your decision. Here’s a good Bitcoin wallets guide that will help you decide on which is best for your personal needs. We personally have hardware wallets and we pretty much love the Ledger Nano S.
As you can probably see, the world of Bitcoin is not very complicated unless you go into the technical stuff. Many say that Bitcoin (or some other cryptocurrency) will take over our classic financial system and while that day will nto come very soon, it’s worth understanding that blockchain technology will revolutionize the internet and the whole market in the next few years.