Unless you’ve been hiding under a rock, you’ve probably heard about cryptocurrency (or Bitcoin, to be precise). Last year alone, the news of Bitcoin’s highs and lows hit major headlines throughout the globe. Which begs the question: what’s all the hoodoo about Bitcoin and cryptocurrency?
In this article, we’ll touch on 6 talking points that’ll help you get started in the tumultuous world of cryptocurrency and, more so, Bitcoins.
#1. What’s Bitcoin?
Bitcoin was the first cryptocurrency, and currently, the most widely used and talked about. The brainchild of an elusive fellow by the name Satoshi Nakamoto, Bitcoin was conceived around January 2009. Interestingly, the creator disappeared before the project took off. By definition, however, Bitcoin is a digital currency that’s backed by Blockchain technology, a decentralized, distributed virtual ledger stored in a network of computers.
#2. What’s Bitcoin Mining?
Perhaps you’ve heard your friends or coworkers talk about making money by mining Bitcoins. You see, a Bitcoin uses the so-called ‘hashcash proof of work function’ and is stored in a public ledger (the blockchain). As such, Bitcoin mining is what it sounds like: bringing another currency into existence.
It’s essentially the process by which transactions are verified and added to the blockchain. By mining, you’re actually releasing Bitcoins into the public ledger. The incentive of mining Bitcoin is that the miner is rewarded in the forms of the fees associated with introducing these new coins.
#3. What’s Cryptocurrency?
The so-called crypto or cryptocurrency is an electronic/digital/virtual money made with Blockchain technology to achieve three things: (1) regulate how it’s made, (2) safeguard the transactions, and (3) protect and conceal the identities of the owners.
#4. Can I Spend Bitcoins?
Yes, you can. While it might not seem obvious, many people around the globe use Bitcoins (and, of course, other cryptos) to buy products, services, and even invest. In fact, the biggest acceptors of Bitcoin payments include Expedia, Overstock.com, Dish, and Newegg.
#5. How Do I Purchase or Sell Bitcoins?
Lucky for you, you actually don’t have to know the hoot about hash codes, blockchain or even cryptocurrency to get in on Bitcoin craze. Interested people usually purchase or offload Bitcoin through what they call cryptocurrency exchanges. They are like marketplaces where you can transact using these virtual currencies. More importantly, you will need a Bitcoin wallet to keep your cryptocurrencies in.
#6. How Do I Transact with Bitcoins?
If you want to send a bitcoin to someone else in an exchange with traditional currency (often the dollar), you make your intention known and the computer nodes (within the Blockchain) scan the entire network to confirm and validate that:
- You have the Bitcoin you want to transact
- You have NOT sent the Bitcoin to someone else
Once these facts have been confirmed and validated, the transaction is made/included in the public ledger. The transaction, once it has been completed, cannot be undone. More specifically, in the back end, you are transferring the ownership of an encrypted key.
