Bitcoin 101: The Basics
All of us have heard about Bitcoin nowadays. We can see it on the news; we can use it to make purchases online and to put our money aside in bitcoin if we want. But what is Bitcoin, is it a smart idea to invest in it and how can you get the best results from it? Let’s find that out right now and see whether these virtual forms of money are the future of currencies or not. Welcome to Bitcoin 101!
What is Bitcoin?
Bitcoin is a type of digital currency that first appeared in 2008. Since then, it has become one of the most popular digital currencies in the world, even it can be found in limited supply. Since this is a currency that’s created and also held electronically, there is no person with control over it. You will need an online/hardware wallet to store the bitcoins. Each Bitcoin is created by mining software that was designed to solve mathematical problems.
Miners can create only 21 million bitcoins, so these are in a very limited supply. On the other hand, the coins can be split into smaller parts. As a result, you will be able to purchase a wide variety of items without any problems.
Unlike regular currencies which based on silver or gold, bitcoin requires you to solve complex mathematical equations. If you want to create it, you will need to harness the power of mathematical equations via a dedicated tool. The mathematical formula used to create bitcoins is widely available; everyone can use it. Not only that but the software on its own is open source so you can easily access it if you want as well.
What do you need to work with Bitcoin?
A great thing about Bitcoin aside from its accessibility is that the usage process is not as complicated as you would expect it to be. You will first need to have a Bitcoin wallet where you store all of your bitcoins. A wallet is important because it will offer you with the best way to store your coins as fast as possible.
Thankfully, there are Bitcoin wallets which you can access online; you have hardware-based wallets, and you also get downloadable software that you can use as a Bitcoin wallet. There are many possibilities to be had here, it all comes down to you to access them. Bitcoin wallets are secure and fully encrypted, so the possibilities of getting hacked are very, very small.
You can get or sell Bitcoins at various exchange websites. These are sites created specifically to offer you a place where you can share or sell bitcoins as you see fit. The great thing about websites like LocalBitcoins and Coinbase is that they are fair to the customer and also provide you with an excellent value for each transaction. So, if you are interested after reading my Bitcoin 101 and want to get started, these exchange websites are maybe the best pick for you!
What is a Bitcoin Faucet?
The Bitcoin faucet is as a reward system that can either take the form of a website or application. The way it works is very similar to a regular faucet, hence the name of this entire system. The main idea is that it will send rewards in tiny amounts when you complete a task on a designated website. These tasks can vary from simply fulfilling a captcha form to watching a required amount of advertisements. Some faucets deliver other types of cryptocurrencies as well, so it does depend on the situation most of the time.
A thing to note about any Bitcoin faucet is that it delivers rewards at specific points in time. These faucets tend to provide only a fraction of a Bitcoin, but most of the time the value will tend to fluctuate here. The reward for each transaction can usually be placed at around 1000 satoshi, or 0.00001 Bitcoins. Yet there can also be much more significant rewards as well depending on the conditions of each faucet. These prizes are usually kept in the user’s account of each faucet at first. Once a sufficient amount of Bitcoin has been collected, the faucet’s operators allow the users to withdraw the balance and transfer it to their Bitcoin wallet.
What are benefits and risks of the Bitcoin currency?
Bitcoins do have their ups and downs, just like any other currency. The upside for Bitcoins is that they are very fast. You can complete transactions very quickly and without any worries. It helps you take full control over how fast you complete a transaction and how great the results can be in the end.
Moreover, Bitcoin-based transactions are anonymous. You never have to worry about having someone being able to track your transactions. They are encrypted, anonymous and don’t leave any trace. Also, it doesn’t take a lot of time to set up the bitcoin system; you can get your money in the Bitcoin wallet very fast.
In theory, you can mine as many bitcoins as you want. However, the mining process does require a lot of computing power, and it might not be as rewarding as you might think. It does provide a good ROI if you have multiple computers doing the mining, but a single computer won’t be able to cover its functioning costs if you leave it to mine on its own. That’s why in recent years, large data centers, so-called mining farms, have taken over the majority of the Bitcoin mining business. Some of these providers also offer their services to customers, calling themselves cloud mining services.
As a downside, Bitcoins are becoming more and more attractive to scammers. Since it’s easy to pay online with them, a lot of scammers tend to show products/services with very low prices in Bitcoins. They won’t offer any product after the purchase. Why? The Bitcoin system does not allow any chargeback. The system on its own was created to be secure and thus everything is anonymous. If your money gets stolen, there is no way to get it back.
Bitcoins are some of the most exciting and rewarding currencies that you can find on the market. They offer so many possibilities for online purchases, and you can even save your money in Bitcoin if you want. The future is bright for this currency, even if it’s in limited supply!
I hope that my Bitcoin 101 class has answered the basic question’s you’ve never dared to ask about Bitcoin! To find out more about new opportunities, be sure to follow the regular updates right here at Earn with Bitcoin! Got any more questions? You are very welcome to contact me, and I’ll try to clear up any uncertainties!